Cree, Inc v. Xiu Ping Chen et al
OPINION & ORDER granting in part and denying in part Defendants' 90 Motion to Dismiss for Failure to State a Claim. Defendants' motion to dismiss is denied as to: (1) the false designation of origin claim; (2) the trademark infring ement claim; and (3) Enumber. As to the XM-L and XLAMP Marks, defendants' motion is granted and plaintiff's claims premised on these two Marks are dismissed. If plaintiff wishes to amend, it must seek leave to do so by 8/24/2017. Ordered by Judge Nina Gershon on 7/27/2017. (Barrett, C)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
'' JUL 2 8 2017
OPINION & ORDER
No. 16-cv-1065 (NG) (CLP)
- against XIU PING CHEN, et al.,
GERSHON, United States District Judge:
Plaintiff Cree, Inc. ("Cree") brings this action against Hang Feng Wu ("Wu"), Xiu Ping
Chen ("Chen"), Enumber, Inc. ("Enumber"), and N&K Trading, Inc. ("N&K")—the successor in
interest to Yall, Inc. ("Yall")—(collectively "defendants") for violations of the Lanham Act, 15
U.S.C. §§ 1051 et seq.' Plaintiff filed its initial complaint on October 15, 2015, in the Central
District of California. Pursuant to the parties' stipulation, the case was transferred to this district
on March 3, 2016. On December 29, 2016, plaintiff sought leave to file an - amended complaint,
which I granted on April 27, 2017. Plaintiff filed its amended complaint ("Am. Compl.") on May
1, 2017. Defendants now move for partial dismissal of the Amended Complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, defendants' motion is
granted in part and denied in part.
Plaintiff is a company incorporated in North Carolina that designs, develops, and
manufactures light-emitting diodes ("LEDs"). Plaintiff manufactures and sells LED bulbs, LED
Plaintiff voluntarily dismissed two other defendants—Xiu Min Chen. and Xiu Juan Chen—
on September 8, 2016.
lighting products, LED components, and LED chips to manufacturers, resellers, and retailers, and
licenses its trademarks to manufacturers. Am. Compi. at ¶ 17.
Plaintiff has obtained trademark registrations for the CREE word mark and the XLAMP
word mark, and has an application pending for registration of the XM-L word mark. Id. at ¶ 18.
Additionally, plaintiff has obtained trademark registrations for four Cree design marks
(collectively with the word marks, the "Marks"). Id. at ¶ 19 .2 Cree alleges that its products have
earned a reputation for "innovation, quality and performance, and Plaintiff has spent substantial
time, [and] money on television, print, and online advertising in an effort to develop consumer
recognition and awareness of its CREE LED Products and the CREE Trademarks." Id. at ¶ 20.
Because of its extensive use of the Marks and because of the quality of its products, plaintiff
contends that the Marks "have been prominently placed in the minds of the public. . . Indeed, the
CREE Trademarks are famous in the United States and around the world." Id. at ¶J 21, 22. As
part of its business model, plaintiff "authorizes third party product manufacturers that use CREE
LEDs in their products to use the CREE Trademarks under license, including but not limited to
third party product manufacturers of consumer portable and high-end portable lighting products
such as flashlights, head lamps, lanterns, bike lights, tactical flashlights, and weapon lights." Id.
at 11 24.
Plaintiff claims defendants import non-genuine Cree products from China, sell them online,
and then ship the products to the purchasing customer. Plaintiff alleges that defendants import the
goods from the Chinese company (not named as a defendant) Fujian Zongteng Network Co., Ltd
("FZN") and store the goods in a warehouse owned by defendants. Then, defendants, in
conjunction with FZN, register accounts on Amazon, eBay, and Tmart.com under various
These four design Marks correspond to six trademark registration numbers.
usernames to advertise and sell these non-genuine Cree products to the consuming public. The
allegedly infringing products sold by defendants include, inter alia, flashlights, headlamps, and
bike lights. Plaintiff claims that defendants intend to cause consumer confusion such that
consumers will believe these are genuine Cree products. Id. at ¶ 38.
According to the Amended Complaint, Wu was the chief executive officer of N&K and
Enumber, and Chen was the president of N&K. These were the companies that processed the
payments for and shipped the goods listed on eBay, Amazon, and Tmart. Given Wu and Chen's
prominent positions within these companies, plaintiff claims that they financially benefitted from
When plaintiff moved to file the proposed amended complaint, it attached a declaration by
Marcus Chaney ("Chaney Declaration"), a supplemental declaration by Marcus Chaney
("Supplemental Chaney Declaration") (collectively, "Chaney Declarations" or the
"Declarations"), and exhibits to those declarations.
See Dkt. Nos. 69-2, 77-1. The Chaney
Declarations chronicle the purchases plaintiff made of items bearing the allegedly infringing
Marks. Of the seven Marks identified in the Amended Complaint, the Declarations detail
purchases of products bearing six of these seven Marks. See Chaney Declaration Exs. E. H, K, M,
0 (showing purchases bearing allegedly infringing Cree and XM-L Marks); Supplemental Chaney
Declaration Ex. V (showing purchases bearing the four allegedly infringing design Marks). The
only infringing Mark that the Chaney Declarations do not describe as being purchased from
defendants is the XLAMP Mark.
Specifically, on January 27, 2015, plaintiff authorized the purchase of a purported Cree
flashlight from the eBay seller "yall-fr." Payment for this item was made to N&K. On the
purchased item were allegedly non-genuine Cree and XM-L Marks, and the item was received in
a package identifying N&K as the sender.
See Chancy Declaration Ex. E. In total, plaintiff
authorized the purchase of 12 allegedly infringing flashlights that were sold and distributed by
N&K. Chancy Declaration at ¶ 7.
On August 5, 2015, plaintiff authorized the purchase of a "4X Car Wedge LED Cree
Reverse Light Bulb Signal Backup Lamp." Payment was made to N&K. This item also had
allegedly non-genuine Cree Marks, and the item was received in a package identifying N&K as
the sender. Id. Ex. H.
On October 28, 2015, plaintiff authorized the purchase of an "1800 Lumens Super Bright
LED Headlamp." The purchased item's user guide contained the XM-L Mark to describe the type
of LED used to power the headlamp, and the item was received in a package identifying N&K as
the sender. Id. Ex. K.
This action commenced on October 15, 2015. Defendant Wu was served on October 28,
2015. On October 23, 2015, Enumber was incorporated and Wu was identified as the CEO,
Secretary, CFO, and President. On March 24, 2016—five months after this action was initiated—
plaintiff authorized the purchase of an "LED Headlight for Bicycle." The item's listing on eBay
identified the LED emitter brand as "CREE" and the LED type as "XML."
Id. at ¶ 16; Ex. M.
Payment was made to Enumber. The purchased item had an allegedly non-genuine XM-L Mark,
and the item was received in a package identifying N&K as the sender. Id. Ex. 0.
Based on this alleged conduct, plaintiff brings four claims in the Amended Complaint: (1)
trademark infringement pursuant to 15 U.S.C. § 1114; (2) false designation of origin and unfair
competition pursuant to 15 U.S.C. § 1125(a); (3) contributory trademark infringement; and (4)
vicarious trademark infringement. 3 Defendants move for partial dismissal and argue that the
Amended Complaint fails to state a claim: (1) as to the XM-L Mark; (2) as to the XLAMP Mark;
(3) for false designation of origin as to all Marks; (4) for trademark infringement as to all Marks
to the extent the claim relies on consumer confusion rather than counterfeiting; and (5) as to
Motion to Dismiss Standard
In deciding a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the
court must accept as true all well-pleaded factual allegations and must draw all inferences in
plaintiff's favor. Swiatkowski v. Citibank, 446 Fed. Appx. 360, 360-61 (2d Cir. 2011). To survive
a motion to dismiss, a complaint must contain sufficient factual matter to "state a claim to relief
that is plausible on its face." Ashcroft v. Iqbal, 556 U. S. 662, 678 (2009) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists when a plaintiff "pleads factual
content that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged." Id.
In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a
district court may consider the facts alleged in the complaint, "documents attached to the complaint
as an exhibit," and documents incorporated by reference in the complaint.
Chambers v. Time
Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002). A court may also consider a document that is not
As discussed below, plaintiff has already dismissed its trademark dilution claim and
stipulated that it is discontinuing its pursuit of a counterfeit theory as to the unregistered XM-L
incorporated by reference if "the complaint relies heavily upon its terms and effect, thereby
rendering the document integral to the complaint." Id. (internal quotation omitted). 4
April 26, 2017 Conference
On April 26, 2017, I held a conference regarding plaintiff's motion to amend its complaint.
At that time, despite extensive briefing by the parties on many of plaintiff's claims, I limited my
rulings to the ways in which plaintiff was seeking to amend its complaint, i.e., (1) to eliminate the
California state law claim; (2) add a vicarious trademark infringement claim; (3) add a contributory
trademark infringement claim; and (4) add Enumber as a defendant. I granted plaintiff's motion
in its entirety. In support of its motion to amend, plaintiff included its proposed amended
complaint. After granting plaintiff leave to amend, I directed plaintiff to file the Amended
Complaint in the same form as the proposed amended complaint, which plaintiff ultimately did.
See Transcript of April 26, 2017 Conference ("Transcript") at 19.
In addition to addressing these four proposed amendments, the parties' briefs also
extensively discussed the validity of other claims brought by plaintiff in its original complaint.
Though I noted that deciding these issues on a motion to amend was improper and that a motion
to dismiss was the proper mechanism to present these arguments, I attempted to provide guidance
Defendants argue I cannot rely on the Chaney Declarations because they are not
incorporated by reference or integral to the Amended Complaint. Defs. Mem. at 10-11.
However, these Declarations were attached to the proposed amended complaint. Given my
directive, discussed below, that plaintiff file the Amended Complaint in the same form as the
proposed amended complaint, I deem the Declarations "attached to the complaint." Chambers v.
Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002). In their motion, defendants argue that
plaintiff's failure to attach these Declarations to the Amended Complaint was for "strategic
reasons," but defendants do not identify what these strategic reasons could be. Defs. Mem. at 11.
Additionally, defendants fail to identify any prejudice that they would suffer in having these
Declarations deemed attached to the Amended Complaint. Defendants were aware of these
Declarations prior to moving to dismiss and, in fact, argue their motion to dismiss as if the
assertions in the Declarations were part of the Amended Complaint.
to the parties regarding the strength of their respective arguments. As a result, plaintiff agreed to
dismiss its trademark dilution claim and stipulated that it was discontinuing its pursuit of a
counterfeit theory as to the unregistered XM-L Mark. See Transcript at 13; Dkt. No. 87.
Contrary to plaintiff's assertion in its opposition to defendants' motion to dismiss, I did not
decide any issues presented by the pending motion to dismiss at the April 26 conference. Rather,
I stated, "I think I should be addressing now just those things in the proposed amended complaint
which would change the currently operative pleading. Unless I hear otherwise from you with
regard to this, that's what I intend to do, address that first, and then I'm happy to discuss with you
my sense of the validity or invalidity of the other claims." Transcript at 2. Accordingly, I will
decide all of the issues defendants present in their pending motion.
Likelihood of Confusion
Turning to the substance of plaintiff's claims, I begin my analysis with whether plaintiff
has sufficiently pled likelihood of confusion. Defendants argue that plaintiff has failed to plead
likelihood of confusion, thus requiring dismissal of its false designation of origin claim in its
entirety and its trademark infringement claim to the extent it relies on a theory of confusion rather
Courts employ the same standard when analyzing claims for trademark infringement under
the Lanham Act, 15 U.S.C. § 1114(1)(a), and false designation of origin under the Lanham Act,
15 U.S.C. § 1125(a). Virgin Enterps. Ltd. v. Nawab, 335 F.3d 141, 146 (2d Cir. 2003). As to an
infringement claim, the Lanham Act prohibits the "use in commerce [of] any reproduction,
counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering
for sale, distribution, or advertising of any goods or services on or in connection with which such
use is likely to cause confusion, or to cause mistake, or to deceive." 15 U.S.C. § 1114(1)(a). The
elements of trademark infringement are that: (1) the plaintiff holds a valid mark entitled to
protection; (2) the defendant used the mark in commerce in connection with the sale or advertising
of goods or services without the plaintiffs consent; and (3) the defendant's use is likely to cause
confusion. See 1-800 Contacts, Inc. v. When UCom, Inc., 414 F.3d 400, 406-07 (2d Cir. 2005).
As to a false designation of origin claim, the Lanham Act prohibits any misleading
representation of fact that is "likely to cause confusion, or to cause mistake, or to deceive as to the
affiliation, connection, or association of such person with another person, or as to the origin,
sponsorship, or approval of his or her goods, services, or commercial activities by another person."
15 U.S.C. § 1125(a)(1)(A). Though subject to the same standards as a trademark infringement
claim, Section 1125(a) protects unregistered marks if they would qualify for registration as
trademarks, unlike Section 1114(a) which protects only registered marks. See Chambers, 282 F.3d
Both of these claims require plaintiff to plead likelihood of confusion. A plaintiff can plead
likelihood of confusion in two ways. First, plaintiff can plead that defendant's goods are
counterfeits. A mark is counterfeit if it is "identical with, or substantially indistinguishable from,
a registered mark." Kelly-Brown v. Winfrey, 717 F.3d 295, 314 (2d cir. 2013) (quoting 15 U.S.C.
§ 1127). A counterfeit mark is inherently confusing and confusion is presumed. See Coach, Inc.
v. Allen, 2012 WL 2952890, at *7 (S.D.N.Y. July 19, 2012). Only registered marks, however, can
avail themselves of the counterfeit theory. See 15
u.s.c. § 1127; C&L Int'l Trading Inc. v. Am.
Tibetan Health Inst., Inc., 2013 WL 6086907, at *4 (S.D.N.Y. Nov. 19, 2013).
The other way to show likelihood of confusion is pursuant to the eight factors articulated
by the Second Circuit in Polaroid Corp. v. PolaradElecs. Corp.,287 F.2d 492, 495 (2d Cir. 196 1)
("Polaroid factors"). These factors are: (1) the strength of plaintiffs mark; (2) the similarity of
the marks; (3) the competitive proximity of the products in the marketplace; (4) the likelihood that
the senior user will bridge the gap by moving into the junior user's product market; (5) evidence
of actual confusion; (6) the junior user's bad faith in adopting the mark; (7) the respective quality
of the products; and (8) the sophistication of the consumers in the relevant market. See Van Praagh
v. Gratton, 993 F. Supp. 2d 293, 301 (E.D.N.Y. 2014) (citing Polaroid Corp., 287 F.2d at 495).
The Second Circuit has made clear—and district courts routinely state—that determining
the likelihood of confusion is a "a fact-intensive inquiry that depends greatly on the particulars of
each case" and "ordinarily does not lend itself to a motion to dismiss." Kelly-Brown, 717 F.3d at
307; Van Praagh, 993 F. Supp. 2d at 303. "No single factor is dispositive, and cases may certainly
arise where a factor is irrelevant to the facts at hand."
mt '1 Info. Systs. Sec. Certification
Consortium, Inc. v. Sec. Univ., LLC, 823 F.3d 153, 160 (2d Cir. 2016) (internal quotation omitted).
Ultimately, the question is whether, "looking at the products in their totality, consumers are likely
to be confused." Id. (internal quotation omitted). At the pleadings stage, courts have not required
plaintiffs to address all of the Polaroid factors in order to deem the pleading adequate. See World
Trade Ctrs. Assoc., Inc. v. Port Authority of New York & New Jersey, 2016 WL 8292208, at *2
(S.D.N.Y. Dec. 15, 2016) (collecting cases). At the same time, in accordance with Iqbal and
Twombly, "a plaintiff is still required to allege facts regarding likelihood of confusion that would
state a claim to relief that is plausible on its face." Public Free Will Corp. v. Verizon Comm 'n
Inc., 2017 WL 1047330, at *4 (E.D.N.Y. Mar. 17, 2017). "[B]road statements—devoid of any
factual detail—are plainly insufficient as a matter of law." Ahmed v. GEO USA LLC, 2015 WL
1408895, at *3 (S.D.N.Y. Mar. 27, 2015).
Plaintiff has Alleged Its Products are Sold to Consumers
Defendants argue, as a threshold matter, that plaintiff has failed to plead that it sells its
products to consumers or that its licensees do so, and, therefore, plaintiff cannot show likelihood
I reject defendants' premise that "[t]here is not one single allegation that products bearing
the alleged genuine marks identified in paragraphs 18 and 19 are offered for sale, sold, marketed,
or advertised to consumers." Defs. Mem. at 20. At the motion to dismiss stage, a court must draw
all reasonable inferences in plaintiffs favor. Plaintiff has alleged that it has spent substantial time
and money on television and internet advertising in order to develop "consumer recognition" of
its brand. Am. Compl. at ¶ 20. It also alleges that its product has been prominently placed in the
minds of the public, the public associates the Marks exclusively with plaintiff, and that its Marks
are famous in the United States and around the world. Id. at ¶J 21-22. Plaintiff also alleges that
it manufactures, sells, and distributes directly and through authorized distributors.
Id. at ¶ 23.
Given plaintiffs allegation that its Marks are famous among the public, that it invests in
advertising, and that it "sells and distributes," it is a reasonable inference to draw that consumers
have "come into contact" with the Marks, such that they can be confused by consumers. Defs.
Mem. at 20.
Strength of the Marks
"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 Restaurant, LLC, 360 F.3d 125, 130 (2d Cir. 2004).
This concept of strength includes both inherent distinctiveness and acquired distinctiveness
through use in commerce. Id. at 130-3 1.
Because all of the Marks are registered, they are presumed to be inherently distinct. 5 See
Id. Moreover, the Amended Complaint alleges facts as to acquired distinctiveness. For example,
it states that the "CREE LED Products have earned a reputation for innovation, quality and
performance, and Plaintiff has spent substantial time, money on television, print, and online
advertising in an effort to develop consumer recognition and awareness of its CREE LED Products
and the CREE Trademarks." Am. Compi. at ¶ 20. Plaintiff also alleges that it "has built up and
developed significant goodwill in the CREE LED Products. As a result of the quality and
popularity of the CREE LED Products, the CREE Trademarks have been prominently placed in
the minds of the public. Manufacturers, resellers, retailers, consumers, and members of the public
have become familiar with Plaintiffs CREE LED Products and the CREE Trademarks, and have
come to recognize the CREE Trademarks and the CREE LED Products, and associate them
exclusively with Plaintiff." Id. at ¶ 21; see also Id. at ¶ 22 ("Plaintiff has acquired a valuable
reputation and goodwill among the public as a result of such association. Indeed, the CREE
Trademarks are famous in the United States and around the world.").
Plaintiff has sufficiently pled the strength of its Marks based on the combination of inherent
distinctiveness and the acquired distinctiveness that the Marks have attained through use in
Plaintiff repeatedly alleges that the defendants' Marks are confusingly similar to its Marks
and provides images of the genuine Marks; and the Chancy Declarations provide images of the
I exclude the XM-L Mark (which is unregistered) and the XLAMP Mark from this analysis
because, as discussed below, I dismiss all claims premised on these Marks.
allegedly infringing products (which do in fact bear Marks similar to the Marks enumerated in the
Amended Complaint). 6 This is sufficient to allege the Marks are similar.
Competitive Proximity of the Products in the Marketplace and
the Likelihood that the Senior User will Bridge the Gap
Here, the Amended Complaint alleges that plaintiff manufactures and sells lighting
products such as flashlights and headlamps and that defendants are selling non-genuine products
of the same variety. Stating that plaintiff and defendants are selling the same products is sufficient
to allege that the products are in close competitive proximity to one another. For the same reason,
the bridging the gap factor is irrelevant in this case because the parties sell the same product and
are, thus, in direct competition. 7 See Patsy 's Brand, Inc. v. I O.B. Really, Inc., 317 F.3d 209, 218
(2d Cir. 2003) ("Since the sauce products are in direct competition, this [bridging the gap] factor
is not relevant.").
The Second Circuit has acknowledged that "it is black letter law that actual confusion need
not be shown to prevail under the Lanham Act, since actual confusion is very difficult to prove
and the Act requires only a likelihood of confusion." Guthrie Healthcare Syst. v. ContextMedia,
Inc., 826 F.3d 27, 45 (2d Cir. 2016). The Court went on to conclude that, "[t]here is no evidence
in this record of actual consumer confusion. . . While Plaintiff's case would of course be even
stronger if it had evidence of actual consumer confusion, the absence of such evidence does not
The Chaney Declarations do not provide a photograph of the allegedly non-genuine
XLAMP Mark. As stated previously, claims premised on the XLAMP Mark are being dismissed,
and I am excluding that Mark from the analysis as to likelihood of confusion.
Bridging the gap refers to the likelihood that the senior user of a mark that is not in direct
competition with a junior user will, at some time in the future, expand the scope of its business to
enter the junior user's market. Guthrie, 826 F.3d at 45.
particularly weaken Plaintiff's showing of likelihood of confusion." Id. at 45. Plaintiff has not
pled actual confusion here, but if actual confusion need not be shown to ultimately prevail, then it
similarly need not be pled. Had plaintiff pled facts supporting this factor, that would, of course,
have strengthened its case and affected how I evaluate the totality of the factors, but failing to do
so is not dispositive or even "significant." Id.
Bad Faith and Respective Quality of the Products 8
Plaintiff states that defendants' "infringing conduct was committed in bad faith and with
the intent to dilute the CREE Trademarks, and to cause confusion and mistake, and to deceive the
consuming public and the public at large as to the source, sponsorship and/or affiliation of
Defendants, and/or Defendants' non-genuine, counterfeit goods." Am. Compl. at ¶ 40. Plaintiff
provides factual support for this statement by alleging that Defendant Wu was served with the
original complaint in this action on October 28, 2015. On October 23, 2015, Enumber was
incorporated and Wu was identified as the CEO, Secretary, CFO, and President. On March 24,
2016—five months after this action was initiated—plaintiff purchased an allegedly infringing
product from Enumber and the product was shipped by N&K. At that point, defendants were on
notice that plaintiff was claiming infringement of its Marks. See Star Indus., Inc. v. Bacardi &
Co. Ltd., 412 F.3d 373, 389 (2d Cir. 2005) ("Bad faith may be inferred from the junior user's actual
or constructive knowledge of the senior user's mark.").
As to respective quality of the products, an inferior product may cause injury to plaintiff
because it can lead to consumers believing plaintiff's product has declined in quality.
The Second Circuit has noted that two of the Polaroid factors "defendants' good or bad
faith and the quality of defendants' products, are more pertinent to issues other than likelihood of
confusion, such as harm to plaintiff's reputation and choice of remedy." Virgin Enterps., 335
F.3d at 147.
Polo Assoc., Inc. v. PRL USA Holdings, Inc., 800 F. Supp. 2d 515, 537 (S.D.N.Y. 2011). As the
Second Circuit has stated:
[t]he district court found that because of the wide disparity between the products,
this factor was neutral. We find this to be clearly erroneous. Paco Sport's clothing
is of a lesser quality than Paco Rabanne's expensive designer clothes. Were
confusion to exist, it is likely that the casual clothes would diminish Paco
Rabanne's reputation for exclusivity. Rather than being neutral, this factor favors
Paco Sport, Ltd. v. Paco Rabanne Perfumes, 234 F.3d 1262, at *5 (2d Cir. 2000).
Plaintiff alleges that defendants' products "defraud consumers to believe that the
substandard imitations are genuine CREE LEDs, CREE LED Products and/or authorized third
party portable lighting products manufactured by Plaintiffs authorized licensees." Am. Compi.
at ¶ 58 (emphasis added). In line with Paco Sport, plaintiff has alleged that defendants' products
are of inferior quality, which, in the Polaroid analysis, favors plaintiff.
Sophistication of Consumers in the Relevant Market
"The more sophisticated and careful the average consumer of a product is, the less likely it
is that similarities in. . . trademarks will result in confusion concerning the source or sponsorship
of the product." Paco Sport, 234 F.3d at *6. Plaintiff pleads nothing in relation to this factor.
Totality of the Factors
At this stage of the litigation, the question is whether plaintiff has plausibly claimed a
likelihood of confusion. As defendants correctly note, plaintiff cannot rely on conclusory
assertions and legal conclusions in its pleading in order to state a claim. See Dow Jones & Co.,
Inc. v. Int'l Secs. Exchange, Inc., 451 F.3d 295, 307 (2d Cir. 2006); see also Defs. Mem. at 8
(collecting cases). However, as detailed above, plaintiffs allegations are not conclusory and
lacking in factual support. Plaintiffs allegations amount to it claiming that: (1) it has a strong,
well-known mark among "consumers;" (2) the non-genuine Marks are similar to its Marks as
demonstrated by photographs of the non-genuine products; (3) the products are in competitive
proximity; (4) the defendants have acted with bad faith, which is supported by defendants'
continued sale of non-genuine products after the initiation of this litigation; and (5) the nongenuine products are inferior to the genuine ones. At this stage of the litigation, plaintiff has
sufficiently alleged a likelihood of confusion. See Fischer v. Forrest, 2015 WL 195822, at *10
(S.D.N.Y. Jan. 13, 2015); The Name LLC v. Arias, 2010 WL 4642456, at *5 (S.D.N.Y. Nov. 16,
Accordingly, I deny defendants' motion to the extent it seeks to dismiss the false
designation of origin claim in its entirety due to plaintiff's failure to plead likelihood of confusion.
I also reject defendants' motion to dismiss the infringement claim to the extent it is premised on a
consumer confusion theory.
The Unregistered XM-L Mark
Plaintiff's XM-L Mark differs from its other Marks because it is unregistered, though
plaintiff does have a registration application pending for it before the United States Patent and
Trademark Office ("USPTO"). 9 See P1. Opp. at 10. The XM-L Mark can be protected only by
Section 1125(a) because that statute protects unregistered marks if they would qualify for
registration, as opposed to Section 1114(a), which protects only already registered marks.
Chambers, 282 F.3d at 155.
In its opposition, plaintiff states that the XM-L Mark is still unregistered, but notes that the
XM-L Mark was "approved for publication on the principal registered by the USPTO on June 2,
2017." P1. Opp. at 13. Plaintiff does not argue that this status somehow changes the analysis. The
pertinent issue is whether the Mark is registered or unregistered, and plaintiff states that the Mark
is still unregistered.
In order to qualify for trademark registration, a mark must be either inherently distinctive
or have acquired secondary meaning in the minds of consumers. See Star Indus., 412 F.3d at 381.
"Common basic shapes or letters are, as a matter of law, not inherently distinctive."
Id. at 382
(internal quotation omitted). A mark acquires secondary meaning when "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." Vedder Software Grp. Ltd. v. Ins. Servs. Off, Inc., 545
Fed. Appx. 30, 33 (2d Cir.
Courts analyze six factors to determine whether a mark has acquired secondary meaning:
"(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." Christian Louboutin S.A. v. Yves Saint Laurent Am. Holdings,
Inc., 696 F.3d 206, 226 (2d Cir. 2012) (internal quotation omitted).
In its Amended Complaint, plaintiff states generally as to all of the Marks (rather than
specifically as to the XM-L Mark) that the "Cree Trademarks are fanciful, inherently distinctive
and/or have acquired distinctiveness and secondary meaning." Am. Compl. at ¶ 53. There are no
facts as to any of the factors that inform whether XM-L has acquired secondary meaning. The
only factor the Amended Complaint arguably addresses is that plaintiff has expended substantial
resources in advertising. Id. at ¶ 20. Even assuming for purposes of this analysis that plaintiff has
sufficiently pled this factor, it is silent as to the other six factors that speak to secondary meaning.
As to the Mark being inherently distinctive, plaintiff simply states the legal conclusion that the
XM-L Mark is inherently distinctive, with no facts to support the assertion that the XM-L Mark is
The analysis as to secondary meaning is the same for both trademark infringement claims
and trade dress infringement claims (as were at issue in Vedder Software). See GTFM, Inc. v. Solid
Clothing, Inc., 215 F. Supp. 2d 273, 293-94 (S.D.N.Y. 2002).
"intrinsically capable of identifying its source." Louis Vuitton Malletier v. Dooney & Bourke, Inc.,
454 F.3d 108, 116 (2d Cir. 2006) (internal quotation omitted).
In light of plaintiff's failure to allege that the XM-L Mark is either inherently distinctive
or has acquired secondary meaning, any claims premised on this Mark are dismissed. See Vedder
Software Grp., 545 Fed. Appx. at 33; Bubble Genius LLC v. Smith, 2017 WL 888251, at *6..9
(E.D.N.Y. Mar. 6, 2017); Sara Designs, Inc. v. A Classic Time Watch Co. Inc., 2017 WL 627461,
at *3 (S.D.N.Y. Feb. 15, 2017); cf. Bobcar Media, LLC v. Aardvark Event Logistics, Inc., 2017
WL 74729, at *7 (S.D.N.Y. Jan. 4, 2017) (finding sufficient allegations regarding secondary
meaning where plaintiff alleged the advertising budget, external recognition and awards received,
sales figures, and the length and exclusivity of use of the mark in question).
Given the XM-L Mark is not actionable, defendants argue that Enumber should be
dismissed because its only alleged wrongdoing stems from that Mark. Defendants do not address
the fact that the Chaney Declaration states the following as to Enumber, "The [allegedly infringing
product] listing identified the LED emitter brand as 'CREE' and the LED type as 'XML." Chaney
Declaration at ¶ 16. A review of the corresponding Exhibit M demonstrates that the eBay listing
at issue advertising the item for sale lists the "Emitter Brand" as "CREE." Though only the XML Mark appears on the product, the word CREE appears on the listing for sale.
Declaration Exhibit 0. Section 11 14(1)(a) prohibits "the use in commerce [of] any reproduction,
counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering
for sale, distribution, or advertising of any goods or services." Id. (emphasis added). Though the
XM-L Mark is not actionable, the Cree Mark is. For this reason, I do not dismiss Enumber as a
Defendants contend that claims premised on the XLAMP Mark must be dismissed because
the Amended Complaint and the Chaney Declarations do not reference any conduct defendants
have taken as to XLAMP. Integral to both its infringement and false designation of origin claims
is whether consumers are likely to be confused. Plaintiff claims infringement as to seven Marks.
The Chaney Declarations and the accompanying exhibits provide photographs showing six of the
seven Marks appearing on products allegedly bought from defendants (the Cree word mark, the
XM-L word mark, and the four design marks). However, the XLAMP Mark never appears in the
Chaney Declarations or the accompanying exhibits. Plaintiff alleges nothing to support its claim
that defendants ever sold products bearing the XLAMP Mark. Also, without seeing the XLAMP
Mark on defendants' product, it is impossible to assess similarity, a factor integral to the likelihood
of confusion analysis which plaintiff must plead in order to state a claim for trademark
infringement and false designation of origin. For these reasons, plaintiff's claims premised on the
XLAMP Mark are dismissed.
Leave to Amend
Courts "should freely give leave [to amend a complaint] when justice so requires." Fed.
R. Civ. P. 1 5(a)(2). A request to amend should be denied only in the face of undue delay, bad
faith, undue prejudice to the opposing party, repeated failure to cure deficiencies by amendments
previously allowed, or futility of the amendment. See Cox v. Blackberry Limited, 660 Fed. Appx.
23, 25 (2d Cir. 2016).
Defendants contend that plaintiff has already had an opportunity to amend its complaint
and that further amendment is not warranted given this previous opportunity and plaintiff's failure
to identify how it would cure the pleading deficiencies. As discussed above, part of the
complication in this case stems from the procedure employed as to the motion to amend. In
conjunction with its motion to amend, plaintiff offered a proposed amended complaint. At the
April 26 conference, plaintiff was granted leave to amend, but instructed to file the Amended
Complaint in the same form as the proposed amended complaint that accompanied its brief
supporting its motion to amend. Given this directive, plaintiff did not have the opportunity to
revise the proposed amended complaint in a way that addressed issues raised at the conference,
including issues related to the XM-L Mark. Accordingly, plaintiff may seek leave to amend, in
accordance with Rule 1 5(a)(2), in order to address the pleading deficiencies as to the XM-L Mark
and the XLAMP Mark.
Defendants' motion to dismiss is denied as to: (1) the false designation of origin claim; (2)
the trademark infringement claim; and (3) Enumber. As to the XM-L and XLAMP Marks,
defendants' motion is granted and plaintiff's claims premised on these two Marks are dismissed.
If plaintiff wishes to amend, it must seek leave to do so by August 24, 2017."
United States District Judge
Dated: July 27, 2017
Brooklyn, New York
A pre-motion conference for any such motion is unnecessary.
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