Gucci America, Inc v. Duty Free Apparel, Ltd.
286 F.Supp.2d 284 (S.D.N.Y. 2003)
Facts: Gucci owns the trademark and trade name “Gucci†and related “G†and “GG†logos and designs. These trademarks are associated with various articles of Gucci merchandise; jewelry, watches, handbags, wallets, and accessories. Duty Free Apparel, Ltd. (DFA), a Manhattan retailer, sold counterfeit Gucci merchandise to “Gucci Investigators†on two separate occasions. After Gucci filed suit against DFA, DFA identified Harvest Wrap as its source for “Gucci†products; Gucci added Harvest Wrap as defendant in this lawsuit. Gucci also subpoenaed Sherry Dvorkin, a private seller of women’s accessories; Dvorkin purchased $50,000 worth of goods from Harvest Wrap in several cash-based transactions. Gucci’s expert, Luciano Chiarelli, head of Gucci’s Quality Control Department since 1995 determined that the counterfeit products at issue (three products from DFA, two products from Harvest Wrap) are counterfeit. Chiarelli compared the counterfeit product with authentic product components obtained from Gucci suppliers; Chiarelli identified various deviations in each of the five counterfeit items.
Procedure: Gucci alleged claims of trademark infringement and false designation of origin under the Lanham Act against defendants DFA, DFA’s President Joel Soren, Harvest Wrap, and Harvest Wrap’s President Kurt Davidsen. Gucci sought partial summary judgment on the issue of liability for its federal claims against all four defendants. Gucci also sought a permanent injunction to prevent defendants from selling counterfeit Gucci merchandise in the future.
Issues:
1)Whether summary judgment is appropriate for Gucci’s claims?
2)Whether Gucci demonstrated “actual success on the merits†and “irreparable harm†to warrant a permanent injunction?
Holding: Yes; Yes. The court granted Gucci partial summary judgment on its Lanham Act claims, and also permanently enjoined defendants from selling counterfeit Gucci merchandise in the future.
Analysis:
1)The court first identified the proper standard for summary judgment; “the court may only grant summary judgment…if…there is no genuine issue as to any material fact and…the moving party is entitled to judgment as a matter of law.†As the plaintiff would ultimately bear the burden of proof at trial, the plaintiff must make a prima facie showing (with sufficient admissible evidence) that there are no genuine issues of material fact for trial. The defendants (non-moving party) must respond with “specific facts†showing that there is a genuine issue for trial. Further, the court must view the evidence “in the light most favorable to the non-moving party and draw all inferences in favor of that party.â€
2)The court subsequently addressed Gucci’s claims of trademark infringement and false designation of origin. To succeed on both claims, Gucci was required to demonstrate (1) the existence of a valid mark entitled to protection under the Lanham Act, and (2) that defendants’ actions are likely to cause confusion as to the origin of the mark. As the validity of Gucci’s mark was undisputed, the court focused on the “likelihood of confusion.â€
3)The court noted that the eight factors enunciated in Polaroid Corp. v. Polarad Electronics (2nd Cir. 1961) generally govern the determination of “likelihood of confusion†in this circuit. The factors are: “the strength of his make, the degree of similarity between the two 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 buyers.†However, an evaluation of the eight factors is unnecessary in this case because “counterfeits, by their nature, cause confusion.†As such, the court need only resolve two related issues; (1) whether the goods at issue are counterfeit, and (2) whether the defendants sold the goods at issue.
4)The court the found that Chiarelli’s expert findings identifying several deviations between the authentic and counterfeit goods provided sufficient evidence that the goods in question are counterfeit. The court also found that Gucci sufficiently provided the chain of custody of the counterfeit goods from the sellers to Chiarelli. Consequently the court held that Gucci established a “prima facie†case that Gucci is entitled to summary judgment.
5)The court dismissed Harvest Wrap’s assertion of the existence of factual issues regarding the authenticity of the goods at issue. Harvest Wrap alleged the insufficiency of Chiarelli’s examination; he did not do a side-by-side comparison of fully assembled products. Harvest Wrap also alleges that the “deviations†could have occurred after the goods were authentically manufactured, or that the goods were irregular as manufactured, but authentic. The court finds that Harvest failed to allege “specific facts†to counter Gucci’s “prima facie†showing. Harvest Wrap did not offer evidence as to the authenticity of the goods at issue, and did not account for the specific deviations identified by Chiarelli. Further, Harvest Wrap failed to provide specific facts regarding how the goods at issued escaped Gucci’s quality control measures; though the court acknowledged that such measure are not invulnerable, Harvest Wrap offered only speculation, not specific evidence.
6)The court similarly dismissed Harvest Wrap’s assertion of the existence of a factual issue regarding the chain of custody of the goods at issue. Two of the goods at issue traced to Harvest Wrap are two Gucci backpacks seized from Dvorkin. Harvest Wrap contested various elements of Dvorkin’s testimony (the authenticity of the invoice Dvorkin provided, the amount of goods she purchased from Harvest Wrap) to undermine Dvorkin’s credibility. Though Harvest Wrap conceded that it sold Dvorkin backpacks of the same style, Harvest Wrap insists that a genuine issue of fact exists as to whether Dvorkin relinquished two different backpacks to Gucci’s attorneys. However, the court found that Harvest Wrap had no evidentiary testimony to counter Dvorkin’s testimony that she bought the two backpacks from Harvest Wrap; speculation that Dvorkin “switched†Harvest Wrap’s “genuine goods†for another set of counterfeit goods is insufficient to counter Gucci’s “prima facie†case. The court also dismissed Harvest Wrap’s contention that a genuine issue of fact exists as to whether or not it is “in the business of selling counterfeit merchandise.†The court held that “amount†of infringement or harm relates to damages; trademark law does not excuse only “modest†or minimal infringement.
7)Finally, the court addressed Gucci’s request for permanent injunction against the defendants; to obtain a permanent injunction, Gucci was required to show (1) actual success on the merits, and (2) irreparable harm. The court held that the preceding discussion of liability established Gucci’s success on the merits, and a showing of likelihood of confusion established irreparable harm (such a showing is sufficient for this circuit). Consequently, the court granted Gucci’s request for a permanent injunction “enjoining defendants from further trademark infringement against Gucci.â€
286 F.Supp.2d 284 (S.D.N.Y. 2003)
Facts: Gucci owns the trademark and trade name “Gucci†and related “G†and “GG†logos and designs. These trademarks are associated with various articles of Gucci merchandise; jewelry, watches, handbags, wallets, and accessories. Duty Free Apparel, Ltd. (DFA), a Manhattan retailer, sold counterfeit Gucci merchandise to “Gucci Investigators†on two separate occasions. After Gucci filed suit against DFA, DFA identified Harvest Wrap as its source for “Gucci†products; Gucci added Harvest Wrap as defendant in this lawsuit. Gucci also subpoenaed Sherry Dvorkin, a private seller of women’s accessories; Dvorkin purchased $50,000 worth of goods from Harvest Wrap in several cash-based transactions. Gucci’s expert, Luciano Chiarelli, head of Gucci’s Quality Control Department since 1995 determined that the counterfeit products at issue (three products from DFA, two products from Harvest Wrap) are counterfeit. Chiarelli compared the counterfeit product with authentic product components obtained from Gucci suppliers; Chiarelli identified various deviations in each of the five counterfeit items.
Procedure: Gucci alleged claims of trademark infringement and false designation of origin under the Lanham Act against defendants DFA, DFA’s President Joel Soren, Harvest Wrap, and Harvest Wrap’s President Kurt Davidsen. Gucci sought partial summary judgment on the issue of liability for its federal claims against all four defendants. Gucci also sought a permanent injunction to prevent defendants from selling counterfeit Gucci merchandise in the future.
Issues:
1)Whether summary judgment is appropriate for Gucci’s claims?
2)Whether Gucci demonstrated “actual success on the merits†and “irreparable harm†to warrant a permanent injunction?
Holding: Yes; Yes. The court granted Gucci partial summary judgment on its Lanham Act claims, and also permanently enjoined defendants from selling counterfeit Gucci merchandise in the future.
Analysis:
1)The court first identified the proper standard for summary judgment; “the court may only grant summary judgment…if…there is no genuine issue as to any material fact and…the moving party is entitled to judgment as a matter of law.†As the plaintiff would ultimately bear the burden of proof at trial, the plaintiff must make a prima facie showing (with sufficient admissible evidence) that there are no genuine issues of material fact for trial. The defendants (non-moving party) must respond with “specific facts†showing that there is a genuine issue for trial. Further, the court must view the evidence “in the light most favorable to the non-moving party and draw all inferences in favor of that party.â€
2)The court subsequently addressed Gucci’s claims of trademark infringement and false designation of origin. To succeed on both claims, Gucci was required to demonstrate (1) the existence of a valid mark entitled to protection under the Lanham Act, and (2) that defendants’ actions are likely to cause confusion as to the origin of the mark. As the validity of Gucci’s mark was undisputed, the court focused on the “likelihood of confusion.â€
3)The court noted that the eight factors enunciated in Polaroid Corp. v. Polarad Electronics (2nd Cir. 1961) generally govern the determination of “likelihood of confusion†in this circuit. The factors are: “the strength of his make, the degree of similarity between the two 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 buyers.†However, an evaluation of the eight factors is unnecessary in this case because “counterfeits, by their nature, cause confusion.†As such, the court need only resolve two related issues; (1) whether the goods at issue are counterfeit, and (2) whether the defendants sold the goods at issue.
4)The court the found that Chiarelli’s expert findings identifying several deviations between the authentic and counterfeit goods provided sufficient evidence that the goods in question are counterfeit. The court also found that Gucci sufficiently provided the chain of custody of the counterfeit goods from the sellers to Chiarelli. Consequently the court held that Gucci established a “prima facie†case that Gucci is entitled to summary judgment.
5)The court dismissed Harvest Wrap’s assertion of the existence of factual issues regarding the authenticity of the goods at issue. Harvest Wrap alleged the insufficiency of Chiarelli’s examination; he did not do a side-by-side comparison of fully assembled products. Harvest Wrap also alleges that the “deviations†could have occurred after the goods were authentically manufactured, or that the goods were irregular as manufactured, but authentic. The court finds that Harvest failed to allege “specific facts†to counter Gucci’s “prima facie†showing. Harvest Wrap did not offer evidence as to the authenticity of the goods at issue, and did not account for the specific deviations identified by Chiarelli. Further, Harvest Wrap failed to provide specific facts regarding how the goods at issued escaped Gucci’s quality control measures; though the court acknowledged that such measure are not invulnerable, Harvest Wrap offered only speculation, not specific evidence.
6)The court similarly dismissed Harvest Wrap’s assertion of the existence of a factual issue regarding the chain of custody of the goods at issue. Two of the goods at issue traced to Harvest Wrap are two Gucci backpacks seized from Dvorkin. Harvest Wrap contested various elements of Dvorkin’s testimony (the authenticity of the invoice Dvorkin provided, the amount of goods she purchased from Harvest Wrap) to undermine Dvorkin’s credibility. Though Harvest Wrap conceded that it sold Dvorkin backpacks of the same style, Harvest Wrap insists that a genuine issue of fact exists as to whether Dvorkin relinquished two different backpacks to Gucci’s attorneys. However, the court found that Harvest Wrap had no evidentiary testimony to counter Dvorkin’s testimony that she bought the two backpacks from Harvest Wrap; speculation that Dvorkin “switched†Harvest Wrap’s “genuine goods†for another set of counterfeit goods is insufficient to counter Gucci’s “prima facie†case. The court also dismissed Harvest Wrap’s contention that a genuine issue of fact exists as to whether or not it is “in the business of selling counterfeit merchandise.†The court held that “amount†of infringement or harm relates to damages; trademark law does not excuse only “modest†or minimal infringement.
7)Finally, the court addressed Gucci’s request for permanent injunction against the defendants; to obtain a permanent injunction, Gucci was required to show (1) actual success on the merits, and (2) irreparable harm. The court held that the preceding discussion of liability established Gucci’s success on the merits, and a showing of likelihood of confusion established irreparable harm (such a showing is sufficient for this circuit). Consequently, the court granted Gucci’s request for a permanent injunction “enjoining defendants from further trademark infringement against Gucci.â€