Coach Inc et al v. Diva's House of Style et al
Filing
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ORDER granting 19 Motion for Summary Judgment on liability. The finding of liability does not resolve issues related to damages and does not address any remaining claims in the complaint. Signed by Judge Jon E DeGuilio on 12/5/12. (smp)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
COACH, INC. and COACH SERVICES,
INC.,
Plaintiffs,
v.
DIVA’S HOUSE OF STYLE and
ELIZABETH BOND,
Defendants.
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No. 3:11-CV-253 JD
OPINION AND ORDER
On June 16, 2011, Plaintiffs Coach, Inc. and Coach Services, Inc. filed a ten count
complaint against Defendants Diva’s House of Style (now defunct and never made a legally
cognizable business entity) and its owner Ms. Elizabeth Bond seeking damages and injunctive
relief for trademark and trade dress infringement, counterfeiting, and false advertising under the
Lanham Act (15 U.S.C. §§ 1114, 1116, 1117, 1125(a), 1125(c)), copyright infringement under
the Copyright Act (17 U.S.C. § 501, et seq.), trademark infringement and unfair competition
under state common law, and forgery and counterfeiting under state statutory law [DE 1]. In
summary, Plaintiffs allege that Defendants advertised and sold Coach labeled products which
Coach does not manufacture (in other words, knock-offs) and are not authorized retailers of
Coach merchandise.
Now before the Court is Coach’s motion for summary judgment on liability [DE 20]
relative to Plaintiffs’ Lanham Act claims for trademark infringement, unfair competition (false
designation), and counterfeiting,1 and requisite pro se litigant notice filed consistent with Lewis
v. Faulkner, 689 F.2d 100 (7th Cir. 1982) [DE 19-1]. Defendants, proceeding pro se, did not
respond to the motion, even though the Court explicitly advised Ms. Bond that her company
could not proceed pro se and that judgment could be entered against them should she fail to
respond to the summary judgment motion [DE 23; DE 25].
For the reasons that follow, Coach’s motion for summary judgment on liability is
GRANTED [DE 20].
I. STANDARD OF REVIEW
Pursuant to Federal Rule of Civil Procedure 56, summary judgment is appropriate “if the
movant shows that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A party asserting that a fact cannot be or
is genuinely disputed must support the assertion by: citing to particular parts of materials in the
record, or by showing that the materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.
Fed R. Civ. P. 56(c)(1).
The court construes the evidence and all inferences that reasonably can be drawn from
the evidence in the light most favorable to the non-moving party. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986). The Seventh Circuit has cautioned against weighing evidence at
summary judgment, Kodish v. Oakbrook Terrace Fire Prot. Dist., 604 F.3d 490, 507 (7th Cir.
2010), and it has also said that “a factual dispute is ‘genuine’ only if a reasonable jury could find
for either party.” SMS Demag Aktiengesellschaft v. Material Scis. Corp., 565 F.3d 365, 368 (7th
1
Coach did not specifically move for summary judgment on its remaining claims, and thus, the Court does
not consider the same.
2
Cir. 2009). “Summary judgment cannot be used to resolve swearing contests between litigants.”
McCann v. Iroquois Mem’l Hosp., 622 F.3d 745, 752 (7th Cir. 2010) (citation omitted).
If the nonmoving party fails to establish the existence of an essential element on which it
bears the burden of proof at trial, summary judgment is proper–even mandated. Massey v.
Johnson, 457 F.3d 711, 716 (7th Cir. 2006) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 32223 (1986) (holding that a failure to prove one essential element to the party’s case which it bears
the burden of proof on “necessarily renders all other facts immaterial”)). Because Defendants
failed to timely respond to Coach’s Local Rule 56-1 statement of material facts, the Court
considers the facts undisputed for purposes of the motion, consistent with Fed. R. Civ. P.
56(e)(2), and deems those facts admitted to the extent that Coach’s statement is supported by
evidence in the record. See Keeton v. Morningstar, Inc., 667 F.3d 877, 884 (7th Cir. 2012)
(citations omitted). “However, a nonmovant’s failure to respond to a summary judgment
motion, or failure to comply with Local Rule 56-1, does not, of course, automatically result in
judgment for the movant.” Id. Coach must still demonstrate that it is entitled to judgment as a
matter of law. Id. Although Defendants have not provided their own version of the facts, the
Court still views all of the facts asserted by Coach in the light most favorable to Defendants, the
nonmoving party, and draws all reasonable inferences in Defendants’ favor. Id. The Court can
also grant summary judgment on liability, while later holding a trial on damages. See Fed. R.
Civ. P. 42(b); Guzman v. City of Chi., 689 F.3d 740 (7th Cir. 2012).
II. FACTS
The facts of this lawsuit are uncontested. In fact, Ms. Bond has already admitted to
having sold an “imitation purse to a representative from Coach” and to selling knock-off Coach
3
products bearing marks confusingly similar to the Coach Marks as alleged in the complaint [DE
6; DE 7; DE 17; DE 23; DE 25]. Given these admissions, it is not surprising that Ms. Bond did
not respond to the motion and dispute the facts set forth by Coach and the Court finds that the
following uncontested facts are supported by the record evidence.
Coach, a company founded more than sixty years ago as a family-run workshop in New
York, now engages in the manufacture, marketing, and sale of fine leather and mixed material
products including handbags, wallets, accessories including eyewear, footwear including shoes,
jewelry, and watches [DE 1 at 3]. Coach sells its goods through its own specialty retail stores,
department stores, catalogs, and via an Internet website throughout the United States [DE 1 at 3].
Coach is the owner of various valid United States Federal Trademark Registrations, as listed in
pages four through eight of the complaint [DE 1 at 4-8] (collectively referred to as the “Marks”),
which Coach has used in connection with the advertisement and sale of its products and has
expended substantial time, money, and other resources in developing, advertising, and otherwise
promoting the Coach Marks [DE 1 at 3]. As a result, products bearing the Coach Marks are
widely recognized and exclusively associated by consumers, the public, and the trade as being
high quality products from Coach, and have acquired strong secondary meaning [DE 1 at 3-4].
Further, Coach products have also become among the most popular in the world, as Coach
currently has annual global sales exceeding three billion dollars [DE 1 at 4].
Coach alleges that Defendants, well aware of the fame, strength, and goodwill associated
with the Coach brand, have been engaged in designing, manufacturing, advertising, promoting,
distributing, selling, or offering for sale “infringing products” bearing logos and sourceidentifying indicia and design elements that are studied imitations of its Marks [DE 1 at 10-11].
4
By way of failing to timely respond or object to Plaintiffs’ February 7, 2012 Request for
Admissions [DE 20-1, Exb. A, Request for Admissions to Defendants; DE 20-2, Exb. B,
Declaration of Attorney Alejandro Valle], consistent with Fed. R. Civ. P. 36 and Gabbanelli
Accordions & Imports, L.L.C. v. Gabbanelli, 575 F.3d 693, 696 (7th Cir. 2009), Defendants have
admitted that Ms. Bond:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
“sold merchandise bearing the Marks at Issue” (Request No. 1);
had “no contractual authorization from Coach to use the Marks at Issue”
(Request No. 2);
“personally hired, trained, supervised and otherwise directed all
employees of [her] Diva’s store, if any, at all relevant times” (Request No.
7);
“sold accessories on a retail basis to retail customers at all relevant times”
(Request No. 8);
“had sole and/or final decision making authority with regard to the
selection, purchase, display and sale of merchandise from [her] store and
otherwise in connection with [her] sale of Coach-labeled merchandise”
(Request No. 10);
was “displaying and/or offering for sale non-authentic Coach-labeled
merchandise at [her] store, home and through Facebook, at the time [she]
offered such merchandise for sale through these avenues” (Request No.
12);
was “the moving, active conscious force behind the sale of non-authentic
Coach-labeled merchandise described in Plaintiffs’ Complaint” (Request
No. 14);
“sold and/or offered for sale [the non-authentic Coach-labeled items] as
described in Plaintiffs’ Complaint [which] bore marks that were identical,
confusingly similar and/or substantially indistinguishable from authentic
Coach marks/Marks at Issue” (Request No. 15);
had an “intent in connection with selling non-authentic Coach labeled
items which [she] did not have authority to sell or offer for sale . . . to
profit from the value associated with Coach’s distinctive, proprietary
marks/Marks at Issue” (Request No. 16);
acknowledged that “Coach has federal registrations for all of its Coach
Marks/Marks at Issue which it seeks to protect in this matter” (Request
No. 17); and,
engaged in “violations of the Lanham Act as alleged in Plaintiffs’
Complaint [which] were willful in nature” (Request No. 19).
[DE 20-1, Exb. A, Request for Admissions to Defendants].
5
Also included within the First Request for Admissions which Defendants failed to
respond or object to in any way are the following additional facts now deemed admitted:
a.
b.
c.
d.
e.
f.
g.
h.
Ms. Bond “never purchased any items directly from Coach for later resale
to consumers” (Request No. 3);
the “merchandise bearing the Marks at Issue have been purchased and/or
were being offered for sale at Diva’s House of Style, Fort Wayne, Indiana,
a store which [Ms. Bond] owned and/or operated at all relevant times”
(Request No. 4);
the “merchandise bearing the Marks at Issue have been purchased and/or
were being offered for sale at the residential address of Defendant Bond,
23066 Johnathon Court, Elkhart, Indiana 46516” (Request No. 5):
the “merchandise bearing the Marks at Issue have been purchased and/or
were being offered for sale via Defendants’ Facebook page, electronic and
cellular communications, and text messages” (Request No. 6);
Ms. Bond “alone received and/or controlled revenues, if any, from the sale
activity at [her] Diva’s store and otherwise in connection with [her] sale of
Coach-labeled merchandise” (Request No. 9);
Ms. Bond “knew that [she was] purchasing non-authentic Coach labeled
merchandise to sell in [her] store, home and through Facebook, at the time
[she] made such purchases” (Request No. 11);
Ms. Bond “knew that [she was] selling non-authentic Coach labeled
merchandise at [her] store, home and through Facebook, at the time [she]
sold such merchandise through these avenues” (Request No. 13); and,
“the non-authentic Coach-labeled items [Ms. Bond] sold and/or offered
for sale as described in Plaintiffs’ Complaint bore marks that were
counterfeits of authentic Coach marks/Marks at Issue” (Request No. 18).
[DE 20-1, Exb. A, Request for Admissions to Defendants].
III. DISCUSSION
Here, Coach has presented sufficient evidence to support the motion for summary
judgment. The Court has independently verified that the material facts presented by Coach are
uncontested, and show that no genuine dispute as to any material fact exists and that summary
judgment is appropriate on the Lanham Act claims of trademark infringement, unfair
competition, and counterfeiting.
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A.
Trademark Infringement/Unfair Competition (False Designation)
Under the Lanham Act, a party may assert claims for, inter alia, trademark infringement,
see 15 U.S.C. § 1114(1) (in this case, Count II), or unfair competition (false designation), see 15
U.S.C. § 1125(a) (in this case, Count IV). To prevail on either claim, a plaintiff must establish
that: (1) its mark is protectable and (2) the defendant’s use of the mark is likely to cause
confusion among consumers. CAE, Inc. v. Clean Air Engineering, Inc., 267 F.3d 660, 673-74
(7th Cir. 2001) (citations omitted). Registration under the Act affords the registrant a rebuttable
presumption of validity. Id. (citing 15 U.S.C. § 1115(a)). Whether consumers are likely to be
confused about the origin of a defendant’s products or services is ultimately a question of fact.
AutoZone, Inc. v. Strick, 543 F.3d 923, 929 (7th Cir. 2008) (citations omitted). That question of
fact may be resolved on summary judgment only “if the evidence is so one-sided that there can
be no doubt about how the question should be answered.” Id. (other citations omitted).
1.
Protectable Marks
Coach has introduced facts establishing that its Marks, as identified in the Complaint, are
federally registered, and Defendants admit that Coach owns these trademark registrations and
that their intention in selling non-authentic Coach-labeled items was to profit from the value
associated with the Marks. Defendants have produced no evidence to rebut the presumption of
the Marks’ validity, and the registration of the Marks provided Defendants with sufficient notice
of Coach’s ownership and exclusive rights in the Marks. Thus, Coach has met its burden of
proving the first element of federal trademark infringement and unfair competition. See Polo
Fashions, Inc. v. Clothes Encounters, No. 84 C 2491, 1985 WL 96 *3 (N.D. Ill. July 17, 1985)
(holding that the first element of federal trademark infringement was satisfied when the plaintiff
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introduced evidence of registration and the defendant conceded that the plaintiff owned the
registrations at issue and that the trademarks were valid). Where, as here, there is no evidentiary
conflict as to the existence of the valid protectable Marks, it is appropriate for the Court to
determine the remaining issue of whether the challenged Marks are likely to cause confusion
among consumers. See Tony Jones Apparel, Inc. v. Indigo USA LLC, No. 03 C 0280, 2003 WL
22220193 *2 (N.D. Ill. Sept. 24, 2003) (citation omitted).
2.
Confusion Among Consumers
In order to assess the likelihood of confusion, the Seventh Circuit applies a seven factor
test: (1) the similarity between the marks in appearance and suggestion; (2) the similarity of the
products; (3) the area and manner of concurrent use; (4) the degree and care likely to be
exercised by consumers; (5) the strength of the plaintiff’s mark; (6) any actual confusion; and (7)
the intent of the defendant to “palm off” his product as that of another. AutoZone, Inc., 543 F.3d
at 929 (citation omitted). Although no single factor is dispositive, usually “the similarity of the
marks, the defendant’s intent, and actual confusion” are particularly important considerations. Id.
a.
Similarity of the Marks in Appearance and Suggestion
To determine whether two marks are similar, we view the marks as a whole. AutoZone,
Inc., 543 F.3d at 929 (citation omitted). We must compare the marks “in light of what happens in
the marketplace and not merely by looking at the two marks side-by-side.” Id. at 930 (other
citations omitted). “[T]he test is not whether the public would confuse the marks, but whether
the viewer of an accused mark would be likely to associate the product or service with which it is
connected with the source of products or services with which an earlier mark is connected.” Id.
The court should therefore “consider whether the customer would believe that the trademark
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owner sponsored, endorsed or was otherwise affiliated with the product.” Id.
While Coach did not produce photographs of the alleged infringing products, it is
undisputed that Defendants offered for sale and sold handbags, shoes, and other infringing
accessories which “bore marks that were identical, confusingly similar and/or substantially
indistinguishable from” the federally registered Coach Marks at issue. No facts distinguish the
authentic Coach Marks from the non-authentic marks which Defendants purchased, displayed,
and sold. In addition, the goods in question are women’s handbags, shoes, and accessories,
which consist of the same type of products sold by Coach. As a result, the goods involve a
similar class of purchasers, although Coach sells other accessories including eyewear and
jewelry. Further, both Coach and Defendants offer their products through retailers and via the
Internet, which supports a finding that their goods move through similar channels of trade.
Therefore, there is no genuine issue of material fact about the similarity of the Marks, and this
factor weighs in favor of finding a likelihood of confusion.
b.
Similarity of the Goods
The issue in determining the similarity of the goods is whether the goods in question are
related in the minds of the public. See Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456,
463 (7th Cir. 2000) (noting that the inquiry is whether the goods are the kind that the public
might attribute to a single source (i.e. the holder of the mark)). The rights of an owner of a
registered trademark extend to any goods or services that, in the minds of the consumers, might
be put out by a single producer. AutoZone, Inc., 543 F.3d at 931.
The infringing marks used by Defendants appeared on women’s accessories, including
handbags and shoes. For decades, one of the major classes of goods which bear Coach’s
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registered Marks is on handbags, shoes, and other accessories. Therefore, there is no dispute that
consumers would reasonably attribute the goods bearing what appears to be legitimate Coach
Marks to a single source—Coach.
c.
Area and Manner of Concurrent Use of the Goods
“The third factor in the likelihood of confusion analysis assesses ‘whether there is a
relationship in use, promotion, distribution, or sales between the goods or services of the
parties.’” Autozone, Inc., 543 F.3d at 932 (citing CAE, Inc., 267 F.3d at 681) (quoting Forum
Corp. of N. Am. v. Forum, Ltd., 903 F.2d 434, 442 (7th Cir.1990)). Although Coach did not
address this factor in great detail, it is undisputed that Coach advertises and promotes products
bearing the Coach Marks throughout the United States, and that Defendants were selling the
non-authentic products in Fort Wayne and Elkhart, Indiana. Defendants do not “cite any
authority, however, for conditioning infringement on the scale of the parties’ respective
operations, and for good reason: that proposition is undoubtedly incorrect.” See id.
“[T]rademark law makes no exception for the localized infringer.” Id. Here, the parties here
would be in direct competition for those looking to purchase Coach handbags, shoes, and other
accessories either on the Internet or in retail shops. Accordingly, the undisputed facts show that
area and manner of use of both parties’ goods is concurrent.
d.
Degree of Care Likely to be Exercised by the Purchasers
In considering the degree of care likely to be exercised by purchasers of both products
(authentic and non-authentic), the Court notes that “[t]he more widely accessible and
inexpensive the products and services, the more likely that consumers will exercise a lesser
degree of care and discrimination in their purchases.” CAE, Inc., 267 F.3d at 681. Because the
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marks and the goods in question are virtually indistinguishable, it would require a great deal of
care for purchasers to differentiate between the goods sold by Coach and Defendants. However,
as admitted by Coach, its prices are high, given that an authentic Coach handbag costs almost
$300.00, while one handbag sold by Ms. Bond cost only $50.00. Although there is no evidence
in the record that Coach customers are particularly sophisticated or deliberative, even
considering possible post-sale confusion, the Court finds that when viewing the evidence most
favorably to the Defendants, this factor weighs in favor of Defendants—a reasonable fact finder
could infer that the average consumer may spend a great deal of time and effort when making the
decision to purchase an expensive Coach accessory.
e.
Strength of the Trademark Owner’s Marks
“The stronger the mark, the more likely it is that encroachment on it will produce
confusion.” AutoZone, Inc., 543 F.3d at 933 (citing 2 McCarthy § 11.73, at 11–169 to 170
(2008)) (quoting Champions Golf Club v. Champions Golf Club, 78 F.3d 1111 (6th Cir. 1996)).
The strength of a mark usually corresponds to its economic and marketing strength. Id. (citation
omitted). A mark’s strength is measured both by its conceptual strength (distinctiveness) and its
marketplace strength (secondary meaning). See In re Chippendales USA, Inc., 622 F.3d 1346,
1353-54 (Fed. Cir. 2010) (citing 2 McCarthy, supra, § 11.83).
In this case, the evidence in the record undisputedly supports the conclusion that the
various Coach Marks have plenty of economic and marketing strength. See Coach, Inc. v. Ocean
Point Gifts, No. 09–4214 (JBS), 2010 WL 2521444 *4 (D.N.J. June 14, 2010) (noting that
plaintiff has shown that the relevant Coach marks are “famous” and Defendant’s actions lessen
the capacity of such marks to identify and distinguish Coach products). Coach products are sold
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nationwide and have generated billions of dollars’ worth of income in over sixty years. Further,
nothing in the record calls into question Coach’s uncontested assertion that it has expended
substantial time, money, and other resources in developing, advertising, and otherwise
promoting the Coach Marks. The substantial nature of Coach’s expenditures and profits, in
conjunction with the distinctive nature of the various Coach Marks, constitutes evidence of
strength without any genuine issue of material fact, thereby making confusion due to the
similarity of the marks more likely.
f.
Any Evidence of Actual Confusion
Although evidence of actual confusion, if available, is entitled to substantial weight in the
likelihood of confusion analysis, this evidence is not required to prove that a likelihood of
confusion exists. CAE, Inc., 267 F.3d at 685 (citations omitted). Because evidence of actual
confusion is not essential, Coach’s failure to introduce evidence of actual confusion is not fatal
to an overall finding of a likelihood of confusion.
g.
Defendant’s Intent
A finding of intent to deceive or confuse is not required to establish liability for
trademark infringement, but the factor is relevant where the Defendants intended to palm off its
products as those of Coach. See CAE, Inc., 267 F.3d at 686 (citations omitted). In this case,
Defendants have admitted to knowingly displaying and/or offering for sale non-authentic Coachlabeled merchandise, that the intent in connection with selling the non-authentic Coach-labeled
items was to profit from the value associated with Coach’s distinctive, proprietary Marks, and
that the violations of the Lanham Act were willful in nature. Defendants purchased and resold
products bearing substantially similar, if not identical, Coach Marks because they were
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attempting to “trade off” on Coach’s Marks. Ultimately, there is no genuine issue of material
fact that Defendants knowingly adopted Marks similar to Coach’s, with the intent to mislead
consumers into believing that the products were affiliated with Coach.
h.
Balancing Factors
The seven factor test, based on the undisputed circumstances of this case, weighs
overwhelmingly in favor of Coach, and the Court concludes that Coach has shown that the nonauthentic marks intentionally used by Defendants on the same products are substantially similar
to the federally registered Coach Marks, and that no reasonable juror could conclude that there is
no likelihood of confusion. Therefore, Coach’s motion for partial summary judgment as to
Defendants’ liability for trademark infringement is granted.
In addition, because the same analysis that applies to federal trademark infringement is
used in assessing the merits of Coach’s claim of unfair competition claim under the Lanham Act,
this claim shares the same fate as the infringement claim because the undisputed facts of this
case satisfy both elements of a claim for federal trademark infringement. Therefore, Coach’s
motion for partial summary judgment as to Defendants’ liability for unfair competition under the
Lanham Act is granted.
B.
Counterfeiting
To establish counterfeiting, see 15 U.S.C. § 1114 (in this case, Count I), a plaintiff must
establish four elements beyond mere infringement or false advertising: first, the mark must be
“counterfeit,” meaning “a spurious mark which is identical with, or substantially
indistinguishable from, a registered mark.” 15 U.S.C. § 1127; see also 15 U.S.C. §
1116(d)(1)(B)(i). Second, the mark must be registered on the U.S. Patent and Trademark
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Office’s principal register for use on the same goods or services for which the defendant uses the
mark. See id. § 1116(d)(1)(B)(i). Third, the defendant must not have been authorized to use the
mark at the time the goods or services were manufactured or produced. Id. § 1116(d)(1)(B).
Finally, the defendant must have acted with knowledge and intent. See id. § 1117(b).
As discussed above, Coach has satisfied the elements of counterfeiting under the Lanham
Act—as Defendants have admitted that the non-authentic Coach-labeled items sold or offered for
sale bore marks that were counterfeits of the authentic Coach Marks, that Coach’s Marks were
registered for use on the same goods for which Defendants used the marks without authorization,
and that Defendants did so intentionally and willfully. See Coach, Inc. v. Cellular Planet, No.
2:09-cv-00241, 2010 WL 1853424 *4 (S.D. Ohio May 7, 2010) ([“[t]here is also little doubt that
the counterfeit use of Coach’s marks is likely to cause confusion, mistake, or deceive the public
because the entire purpose of a counterfeit good is to mislead, deceive and confuse customers
and the public as to the origin and authenticity of the goods offered).
Therefore, Plaintiff’s motion for partial summary judgment as to Defendants’ liability for
counterfeiting under the Lanham Act is granted.
C.
Ms. Bond’s Individual Liability
The circumstances that allow recovery directly against individual corporate officers and
agents is litigated with far less frequency than one might expect. See Century 21 Real Estate,
LLC v. Destiny Real Estate Properties, No. 4:11-CV-38 JD, 2011 WL 6736060 *6-7 (N.D. Ind.
Dec. 19, 2011). Long ago, the Seventh Circuit took the position that individual officers are not
ordinarily liable for the infringement of their corporation “in the absence of some special
showing.” Id. (citing Dangler v. Imperial Mach., Co., 11 F.2d 945, 947 (7th Cir. 1926)).
14
The court in Dangler, held that “in the absence of some special showing, the managing
officers of a corporation are not liable for the infringements of such corporation, though
committed under their general direction.” 11 F.2d at 947. The Dangler court explained that an
officer is held jointly liable with the company when he “acts willfully and knowingly—that is,
when he personally participates in the manufacture or sale of the infringing article (acts other
than as an officer), or when he uses the corporation as an instrument to carry out his own willful
and deliberate infringements, or when he knowingly uses an irresponsible corporation with the
purpose of avoiding personal liability.” Id. One district court has explained that “despite its
vintage, Dangler remains the law of this Circuit.” Do It Best Corp. v. Passport Software, Inc.,
No. 01 C 7674, 2004 WL 1660814 *11-12 (N.D. Ill. July 23, 2004) (citations omitted).
Just what qualifies as such a special showing has not always been consistent or clear. See
Century 21 Real Estate, LLC, 2011 WL 6736060 *6. Dangler itself implied, based on prior
precedent, that officers were generally only liable when they acted outside of their official
capacity to further their personal interests, but it did not foreclose other situations in which
officers might be held liable. See id. The Court of Appeals has also upheld individual liability
where there was evidence of “deliberate conduct on the part of the officers to use the corporation
merely to carry on the infringing and unfair practices.” General Motors Corp. v. Provus, 100
F.2d 562, 564 (7th Cir. 1938). Finally—and though it seems to swallow the never-overturned
rule of Dangler—the Court of Appeals has also held that a chief officer and manager of a
corporation may be held personally liable where “he was at all times in control of the
administrative and managerial policy of the corporation.” See Weller Mfg. Co. v. Wen Products,
Inc., 231 F.2d 795, 801 (7th Cir. 1956). Other courts have reached similar conclusions,
15
extending liability to corporate officers who were proven to be “‘a moving, active, conscious
force’ behind the corporation’s infringement.” Ramada Franchise Systems, Inc. v. Boychuk, 283
F.Supp.2d 777, 788–89 (N.D.N.Y. 2003); see also Escobedo v BHM Health Assocs., Inc., 818
N.E.2d 930, 933 (Ind. 2004) (the burden is on the party seeking to pierce the corporate veil to
show by a preponderance of the evidence “that the corporate form was so ignored, controlled or
manipulated that it was merely the instrumentality of another and that the misuse of the
corporate form would constitute a fraud or promote injustice.”) (citations omitted).
In this case, the undisputed material facts are sufficient to meet Dangler’s “special
showing” requirement. The complaint contains allegations concerning Ms. Bond’s role in the
infringement beyond the assertion (and admission) that she was the moving, active and
conscious force behind the misconduct. First, Coach alleges and Ms. Bond has admitted that
she owned or operated at all relevant times Diva’s House of Style, she personally hired, trained,
supervised and otherwise directed all employees of her store, she had sole or final decision
making authority with regard to the selection, purchase, display and sale of merchandise from
her store and otherwise in connection with her sale of Coach-labeled merchandise, she alone
received or controlled revenues, if any, from the sale activity at her store and otherwise in
connection with her sale of Coach-labeled merchandise, and she knew that she was purchasing
and selling non-authentic Coach labeled merchandise in her store. Second, Ms. Bond
specifically admitted as true Coach’s allegation that she sold a non-authentic purse to a
representative from Coach [DE 6, 7].
These facts clearly establish that Ms. Bond was the owner or operator of Diva’s House of
Style at the time of the alleged infringement and was directly involved with and had knowledge
16
of the infringement. In fact, Ms. Bond engaged in the misconduct herself. Therefore, as
Dangler envisioned, Ms. Bond is not being held personally liable for her company’s
infringement based solely on her role or ownership interest, but she is being held personally
liable because she personally participated in the purchase and sale of the infringing articles, used
the company as an instrument to carry out her own willful and deliberate infringements, and did
so to further her own personal interests. In fact, it is unclear whether Diva’s House of Style was
ever a legally cognizable business entity. Ultimately, there is no genuine issue of material fact
that Ms. Bond was personally involved in the infringement and may be held personally liable for
her store’s infringement. See Peaceable Planet, Inc. v. Ty, Inc., 362 F.3d 986, 994 (7th Cir.
2004); see also Microsoft Corp. v. Rechanik, 249 Fed. Appx. 476, 478 (7th Cir. 2007).
IV. CONCLUSION
The undisputed evidence in this case is so one-sided that there can be no doubt about how
the question should be answered. See AutoZone, Inc. v. Strick, 543 F.3d 923, 929 (7th Cir. 2008)
(citations omitted). Based on the foregoing, Coach’s motion for summary judgment on liability
relative to its Lanham Act claims for trademark infringement, unfair competition, and counterfeiting
against Defendants Diva’s House of Style and Elizabeth “Beth” Bond is GRANTED [DE 20]. The
finding of liability does not resolve issues related to damages and does not address any remaining
claims in the complaint.
SO ORDERED.
ENTERED: December 5, 2012
/s/ JON E. DEGUILIO
Judge
United States District Court
17
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