United States Polo Association, Inc. et al v. PRL USA Holdings, Inc.

Filing 94

OPINION: For the reasons set forth above, the PRL Parties' motions for attorneys' fees are denied. (Signed by Judge Robert W. Sweet on 3/1/2012) (pl)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

UNITED STATES POLO ASSOCIATION, INC.,
and USPA PROPERTIES, INC.,
Plaintiffs,

09 Civ. 9476

against

OPINION

PRL USA HOLDINGS, INC., and
L'OREAL USA, INC.,
Defendants.

--------------------------- -x
Sweet, D.J.

In
Polo

this

trademark

Association,

("Properties")

action,

("USPA" )

Inc.

(collectively,

plaintiffs

and
the

USPA

United

Properties,

"USPA

Inc.

Parties"

or

"Plaintiffs") sought a declaration pursuant to 28 U.S.C.
(1)

States

2201:

§

that they have the right to license and sell in the United

States
ASSN. ,"

fragrance
the

products

Double

Horsemen

products bearing the marks
Serial
products

Nos.

77/738,105,

identified

and

packaging

Trademark

and

bearing
"1890,

"U.S.

POLO

and

other

II

identified in Trademark Application
77/760,033

and

in those applications;

77/760,071
(2)

that

on

the

their use

and licensing of such fragrance products and packaging does not
violate

Section

43(a)

and

(c)

of

1

the

Lanham

Act,

15

U.S.C.

§

1125(a)

and

(c),

nor

constitute

infringement,

unfair competition with respect to the
PRL USA Holdings,
(collectively,

Inc.

("PRL

ff

)

dilution

or

ghts of the defendants

and L'Oreal USA, Inc.

the "PRL Parties" or "Defendants")

i

("L'Oreal")
and

(3)

that

their use and licensing of such fragrance products and packaging
does

not

violate

relating

to

the

common

trademark

law

of

infringement,

the

State

unfair

of

New

competition

York
and

trademark dilution.

The

PRL

Parties

brought

infringement,

unfair competition,

Sections

43(a)

§§

32,

1114,

1125(a)

infringement,
unfair

and
and

trade

43(c)
(c),

dress

competition,

unfair

counterclaims

trademark

and trademark dilution under

of

the

and

for

Lanham

Act,

common

infringement,
and

for

15

U.S.C.

law

trademark

trademark

dilution,

deceptive

practices,

and

misappropriation in violation of the statutory and common law of
each state in which the USPA Parties do business,
York General Business Law Sections 133,

including New

349 and 360-1.

The PRL

Parties also filed a motion for a preliminary injunction.
consent of the parties,

On

the motion for a preliminary injunction

was converted into a request for a permanent injunction.

Following an extensive bench trial,
13,

2011

("May

2011

Opinion"),

2

the

Court

by opinion of May
denied

the

USPA

Parties'

request for a declaratory judgment and granted the PRL

Parties'

request

The

background

described

in

for
and

the

a

permanent

procedural

May

2011

inj unct ion.

history

Opinion

of

and

(Dkt.

this

famili

No.

80.)

litigation
ty

with

is

that

opinion is assumed.

On November 14,
award

of

attorneys'

2011,

fees.

the

The

PRL Parties moved for

instant

motion

was

the

heard

on

Part

s'

January 18, 2012.

For

the

reasons

set

forth

below,

the

PRL

motion for attorneys' fees is denied.

The PRL Parties' Motion for Attorneys' Fees is Denied

1. Legal Standard
A court

may

award

reasonable

attorneys'

fees

to

a

prevailing party in an action under the Lanham Act if the case
is "exceptional." 15 U.S.C.
cases

may

party").

award
The

"exceptional
Congress'

reasonable

Lanham Act

attorneys'

does

not

("The court in exceptional
fees

define

to

what

the

prevailing

constitutes

an

history

evinces

to include those cases in which the

"acts of

case,"

intent

1117(a)

§

but

the

legislative

3

infringement

can

be

'deliberate'

or

'willful.'"

_r_e~p_r_i_n~t~__l~'n_

It
finding

characterized
S.

as

Rep.

'malicious'
No.

93 1400

is well

established in the

Second Circuit

willful infringement may

(per curiam)

(finding of

Ltd. __v.

~-'---'---'--

64 9 F. 2 d

94,

95

( 2 d Ci r .

"deliberate and willful"

1987)

render

a

Commc'ns
__

-'----=-2-~-'--~~~

("Of course, del
case

attorneys'

-'--~

Inc.,

__~":""

830 F.2d 1217, 1229

and

thus

support

Inc., 973 F.2d 1033

~~--------------------------~~-----

GAKM Res.

LLC v.

Sales Inc.,

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _~~L__ _ _ _ _ _ _ _ _ _ _ __

2150891,
willfully
ent
bad

at

*7

(S.D.N.Y.

infringed

July

20,

Plaintiffs'

led to reasonable attorneys'

No.

962

F.2d

an

268,

infringement is shown,

272

(2d

2009)

(2d

Cir.

6030,

2009 WL

Defendants

aintiffs

Indeed,

1992)

of

.:::::B-=-r,--i-,--.:::::...=.~---,-,,-=-=-=-

("Because

trademarks,
fees").

award

(2d Cir. 1992);

08 Civ.

ith infringement requires a court to consi

Enters.,

ringement

fees)i Centaur

abrogated on other grounds by

Co. v. McNeil-P.P.C.

1 98 1 )

rate and willful infringement can

'exceptional'

s. "),

that a

See Quaker State Oil

is sufficient to warrant the award of attorneys'

Cir.

as

r a case "exceptional"

may be awarded.

~R-=-e_f_._-=--.::......=.£-,--_V-,--._K~o,--o,--l_t_o..:....n-,--e-,---_I~n,--c-,--.,

Commc'ns
__

(1974),

1974 U.S.C.C.A.N. 7132.

such that attorneys'

~-'--~

'fraudulent'

are

a finding of
the award of

("When

bad

faith

a district court is authorized to award

attorney fees on the basis that an 'exceptional case'

4

has been

established,

and

a

district

court

that

fails

to

consider

awarding attorney fees when bad faith is established abuses its
discretion")

(citing

Inc. v.

Ultracashmere House

Ltd., 724 F.2d 352, 357 (2d Cir. 1983)); Mobius Mgmt. Sys.,

Inc.

v.

1005,

1026

at

least

Fourth

Dimension

(S.D.N.Y.

1994)

Software,

("a

dist

Inc.,
court

ct

880
that

consider an award of attorneys
abuses its discretion"

In

F.

Supp.

fails

to

after a finding of bad faith

(citation omitted)).

addition,

courts

have

found

that

misconduct

litigation may render a case "exceptional" within the meaning of
§

1117,

including

improper

where
where

purpose,

evident, or where a
Couture,

Inc.

2591478,

at

where

plaintiff
bad

L' Oreal USA,

*4-*5

(S.D.N.Y.
v.

2005)

plaintiff

faith

brings

a

lawsuit

litigation

Inc.,

2006)

CE Distrib.

brought

04 Civ.

367 F.

7203,

Supp.

are

2006 WL
see also

2d 283,

th can be est

without

287

ished

in

suit

an

See

(collecting cases);
LLC,

("Fraud or bad

No.

for

tactics

aintiff's claims are meritless.

v.

New Sensor
(E. D.N. Y.

a

bad

faith

an

investigation of the merits of his claim; plaintiffs claims had
no real substance; or plaintiff filed suit as a competitive ploy
Courts in this circuit have also held that bad faith
may be found where a lawsuit is utilized
including

business

advantage

and

5

ult

inhibiting

motives,
competition. 1/)

(citations and internal quotation marks
v. Gold Center Jewelry,
(attorneys'

997 F. Supp. 409, 410-12

(S.D.N.Y. 1998)

party]

and

"caused needless expense for

unnecessarily

consumed

a

great

deal

158 F.3d 631

Court's time"),

1998), cert denied sub nom Home Boy 2000 v. Gucci Am.,
U.S.

1106

Inc.

Guess?,

fees awarded where willful infringement was combined

with litigation conduct that
other

omitted);

(1999) ; Mennan Co. v. Gillette Co.,

657

(S.D.N.Y. 1983)

(awarding attorneys'

was

warrant

the

that

"suit

was

[the

of

the

(2d Cir.
Inc., 525

565 F. Supp.

648,

fees where an inference

initiated

as

a

competitive

ploy") .

2. Bad Faith Inf

As

noted

concluded that

above,

in

the

May

2011

opinion

the USPA Parties adopted the marks
for

fragrance

products

with

the

trade

dress

capit

ize on PRL's reputation and goodwill instead

ir

own.

II

(Op . 46.)

Specifically,

the

and

Court

initial

intent

building

with regard to the USPA's

intent in adopting its mark, the Court found:

"Courts and commentators who have considered the
question equate a
lack of good faith with the
subsequent user's intent to trade on the good will of
the trademark holder by creating confusion as to
source or sponsorship."
EMI Catalogue Partnership v.
Hill, Holliday, Connors, Cosmopulos Inc., 228 F.3d 56,
67 (2d Cir. 2000) (citations omitted) (not
inquiry

6

"to

is "whether defendant in adopting its mark intended to
capitalize on plainti
's good will").
"Bad faith
generally refers to an attempt by a junior user of a
mark to exploit the good will and reputation of a
senior user by adopting the mark with the intent to
sow confusion between the two companies' products."
Starbucks v. Wolfe's
Coffee
Inc., 588 F.3d 97
2d Cir. 2009
(quoting Star Industries, 412 F. 3d at
388) .
Under this factor, "the 'only relevant intent
is intent to confuse.'" Id.
(quoting 4 McCarthy on
Trademarks § 23.113).
Bad faith can be found where prior knowledge of the
senior user's mark or trade dress is accompanied by
similarities
so strong that
it
seems plain that
deliberate copying has occurred.
Att
& Distrib.
Inc., 996 F.2d 577,587 (2d
Cir. 1993) ("Intentional copying, of course, does not
require identical copying. Where the copier references
the prior dress in establishing her design with the
apparent aim of securing the customers
the other
based
on
confusion,
intentional
copying
may
be
found.") .
Here, USPA was undoubtedly fully familiar with the PRL
Parties' marks and trade dress , given the extensive
history of trademark litigation between the parties.
USPA's intent to capitalize on PRL's reputation and
goodwill can be inferred from its decision to adopt a
mark that is so strikingly similar to the PRL Polo
ayer Logo and initi ly employ the same color and
similar trade dress to that used for PRL's most
popular fragrance line sold under the Polo Player
Logo. (Tr. 55:10-21 (Marino); PRL Parties Exs. 16 and
27. )
The explanation given by USPA' s President, Mr.
Cummings, to explain its initial adoption of similar
blue
trade
dress
is
not
persuasi ve.
Cummings
testified that blue packaging was used because USPA
had adopted blue trade dress, namely on the inseam and
waistband labels and hangtags of certain articles in
its apparel lines, and USPA believed that using blue
packaging would better enable consumers to identify
the product as USPA's. (Tr. 215:8 218:2 (Cummings)).
Notably,
USPA
could
have
avoided
this
situation
entirely by choosing a logo that depicts a polo player
in a position and from a perspective that differs from

7

Polo Player Logo with a more clearly distinct form
of packaging (~
ly utilizing a dif
color
non metallic inkl and with no thin matching
border edging)
But it chose not to do so.
That the
USPA Parties and their licensee did not have any
expertise
in
purveying
fragrances
or
develop
a
strategic business plan
a budget
or sufficient
funding
advertisingi and that they worked with a
licensee which would not disclose its name because it
was concerned
as USPA was aware
that it might be
dragged into a lawsuit with Ralph Lauren and had been
unable to find sublicensees due to threat of a
trademark
action
(Tr.
270:22-277:10
(Cummings))
further indicates that the USPA Parties intended to
capitalize on PRV s reputation and goodwill instead
of building their own.
Therefore
the Court finds
that USPA adopted its mark with the intention
talizing on PRL/s reputation and goodwill. [FN 15]
I

I

l

I

I

l

FN15. This is distinct from a finding that USPA
knowingly acted unlawfully at least with regard
to USPA/s adoption of the Double Horsemen mark on
fragrances.
Whether or not the USPA Parties
acted in reliance on the 1984 Order and 2006
apparel
litigation
in
adopting
the
Double
Horsemen with regard to fragrances
this is not
in tension with the Court IS finding that USPA
adopted the mark
and
fragrances initially
wi th trade dress that is strikingly similar to
the POLO BLUE line
with
intention of
capi
izing on PRL IS reputation
goodwill I and
any confusion between its and the PRL/s product.
I

l

l

l

(Op. 4 4 - 4 6 . )

PRL

Parties

argue

justifies an award of attorneys
In opposition

l

I

that

this

finding

fees under 15 U.S.C.

the USPA Parties argue that "where

litigation is one battle in a larger legal war
party should not be permitted to isolate a

8

l

I

as

alone
1117.

§
I

this

the prevailing

particular finding

from the broader context of the case and claim the extraordinary
reI

f

party.

of

attorney

(USPA Mem.

If

fees
3

in order

(Dkt. No.

to punish

88)

the

non-prevailing

(citation and quotation marks

omi tted) . )

The USPA Parties'
its

logical

conclusion,

infringers

on

the

successive

battle

this

theory
in

argument is without merit.
contention
each

larger

a

that

war.

above, an award of attorneys'
cases,

including,

parties

have

where

an

an

if

not

extensive

inj unction has

trademark

this

2000),

upon

proposition.

history

of

previously

Lurzer

GMBH

(S.D.N.Y.
willful

v.

Am.

Instead,

suit

repeat

was

as

but

a

articulated

fees may be warranted in a host of
particularly,

which

reward

Instead,

the

issued.

USPA

Inc.,

in

which

or,

as

the
here,

Nor does
Supp.

F.

Gidatex,
136,

148

2d

Parties

rely,

stand

for

quoting

Gidatex,

Showcase,

those

litigation

82
(S.D.N.Y.

would

Taken to

Judge

Rakoff

in

75

Supp.

F.

2d

98,

102

1998), eschewed an analysis that isolated a finding
infringement

from

the

context

of

a

larger

case

that

presented "multifaceted disagreements for which both sides bear
blame and as to which neither party comes with unclean hands.

If

While Gidatex and Lurzer correctly noted that the attorneys'

fee

analysis must be viewed in the context of the larger case,

the

9

instant

case

did

not

involve

''''multifaceted

disagreements

for

which both sides bear blame."

In

1984,

Judge

Sand

found

that

logo infringed PRL's Polo Pl
USPA
cause

Parties

from

confusion with

pI

logo

content

unless

and

Fashions

the

the

name

PRL

Inc.,

USPA Ex.

"duly note[d]

No.

84
~~

15

in

a

manner

or

using

a

the

Polo

o
1984

WL

USPA Parties

mounted

to

polo

Logo

in

Inc.

v.

Polo

at

*10

(Dec.

1309,

In the May 2011 Opinion the Court

7-9.

(Op. 19.)

it

1984

be

contend,

unclear,
grant

the

did

Plaintiffs any

conduct a licensing program,

not,

as

the

whatsoever to

nor did this Court in the May 2011

, both courts recognized the fact that the USPA

I

Parties may,

likely

Player

Ass'n

infringing marks."

Lest

having no judicially granted right to do so,

the marketplace
infringe the

just

Thus,

while the USPA Part
ability

as

PRL Parties'

of injunctions.

legal

from

1142,

polo

that the USPA parties have violated the 1984 Order

by adopt

Opinion.

POLO

U.S.

Civ.

mounted

Logo and prohibited the

Parties

distinctive

perspective.

------~~------

1984) i

using

USPA's

to

do

any other may

so

long

as

marks or otherwise

to the contrary, both
may enter the market as any
so

with

respect

10

to

their

enter

they do not
e

the

terms

found that
,

their

will

be

necessarily more

limited

been found to infringe.
Ass'n,

Inc.,

utility

520

of

"[a]n

adjudicated

than

others

who

See PRL USA

F.3d 109,

infringer

to

(2d

on

Cir.

previously

infringing

the

[senior

user's]

injunctions

and

contempt

2008)

part

the

maintain

of

safe

a

proceedings

I. 0 . B.

not

Inc. v.

117 18

obligation

v.

have

marks"

Real

a

previously

distance

both

and

(discussing

in

crafting

collecting

Inc.,

from

cases)

317 F.3d 209,

i

Pat's Brand

Inc.

(2d Cir. 2003)

(recognizing that "a party who has once infringed

----~--------~--------------------------~~-----

a

trademark

may

advantageous
frame

be

required

to

suffer

an innocent

than that

an injunction which will

keep a

away from the perimeter of future

party,

Inst.

Inc.,

(\\ [A]

court

away

from

90

may require
the

margin

F.

Supp.

and

conduct

may

be

less

court

can

2d 277,309

v.

(S.D.N.Y.

keep a

proscribe

enjoined

(citations and

Gem Lab Ltd.

Gem

2000)

safe distance

activities

standing alone, would have been unassailable.
unobjectionable

and a

infringement"

an infringer to
line

position

proven infringer safely

internal quotation marks omitted)); E.G.L.
~~--~------~------

a

220

that,

Indeed, otherwise
if

it

constitutes

forts by the defendant to retain at least part of the goodwill
originally

appropriat

from

the

internal quotation marks omitted)).
contention is without merit.

11

plaintiff."
In sum,

(citation

and

the USPA Parties'

Similarly,

though

the

Court

previously

declined

to

find that

"USPA knowingly acted unlawfully at least with regard

to USPA's

adoption of

Op.

46 n.15,

the Double Horsemen mark on fragrances,

the USPA's argument that its adoption of the marks

with blue

packaging was

attorneys'

fees ,

"reasonable"

is

given the finding that

and for fragrances initially with t
similar

to

between

POLO

the
on

capitaliz
its

discretion.

II

BLUE

PRL' s

and

PRL's

Centaur Commc'ns,

Ltd.,

of

"USPA adopted the mark,

the

with
goodwill,

product"

See Quaker State Oil

A grant

dress that is strikingly

1

reputation,

the

ected.

is

Ref.

intent ion

and

any

within

Corp.,

649

of

confusion

the

Court's

F. 2d at

830 F.2d at 1229; GAKM Res. LLC,

95 i

2009 WL

2150891, at *7; E.G.L. Gem Lab Ltd., 90 F. Supp. 2d at 309.

However,

that

this

Court

previously

found

that

the

USPA Parties adopted their mark and trade dress with the intent
"to

capit

ize

building

their

award of

on

PRL's

own"

(Op.

fees.

2001 U.S.

of

finding

attorneys'
grounds
Supp.

by

2d at 147

does

Inc.

LEXIS

at

bad

fees")
67

46)

See Coach

st.

("a

reputation

9879,

faith

does

v.

Appx.

626

not

not

(2d

a

fortiori

(S.D.N.Y.

require

instead
require

t

Cir.

2002) i

Co.

of
the

Inc. ,

Jul.

18,

2001)

court

to

award

vacated in

("The mere existence of a

12

goodwill

We Care Tradi

*48-49

(citation omit

Fed.

and

on other
Gidatex,

finding of

82

F.

however,

does not automatically entitle the prevailing party to

attorneys'

fees."

(citation omitted)).

While the USPA Parties

adopted the marks and packaging with the intent to capitalize on
the

PRL

Parties'

additionally
declines,

reputation

exceptional

on

the

and

about

basis

goodwill,

there

case

at

bar.

USPA

Parties'

the

of

the

is

nothing

The

Court

bad

faith

infringement, to award attorneys' fees.

3. Lit

ives and Tactics

The

PRL

Parties

argue

that

attorneys'

fees

warranted on a second independent basis due to:
the USPA Parties' improper motives for filing a
declaratory judgment complaint based on their
initial and obviously infringing logo, use of
"POLO" and blue packaging, misrepresenting that
they
had
not
yet
commenced
sales,
and
misrepresenting
the
reason
for
retailers'
reluctance to accept the product, followed by
their rapid change to different packaging upon
completion of L'Oreal's first survey.
(PRL

Mem.

12

(Dkt.

No.

83).)

The

PRL

Parties

contend that in particular the USPA Parties'
introducing
L'Oreal

the

blue

conducted

its

packaging
survey

only
caused

additional legal and expert fees."

13

rd.

to

further

"bad faith in

change
L'Oreal

it

after

to

incur

are

Defendants
Jui

Couture

t

a

argue

court

were warranted

t

in

an

analogous

in this district

situation

in

found that attorneys'

explaining:

So, why did Couture persist? Couture wanted to wring
an agreement from Lancome that Couture could enter
cosmetics market
with Juicy-branded products.
It
sought coexistence with Lancome and did not expect
that it could defeat Lancome's right to remain in
market. It chose to use litigation to achieve a
commercial objective when it had no valid claim of
ury. [FN9] Seeking 1
in the negotiation of a
licensing agreement or for entry into a new market is
not a valid ground for continuing lit
ion when a
party knows that its claims are devoid of merit.
Couture acted in bad faith and for an improper purpose
from at least the close of
discovery.
FN9. It was, of course, entirely premature for
Couture to bring a declaratory judgment action,
since it had not taken sufficient steps towards
development of a cosmetics line and had not been
threatened with litigation by Lancome.
Couture t 2006 WL 2591478, at *7.

The USPA Parties no doubt filed the instant action in
attempts

to

fragrances
blue

adjudicate

bearing

the

the
Double

dress.

t

premature,

lawfulness

of

their

Horseman mark with

declaratory

action

since the USPA Parties had not

the

was

e

of

initial
arguably

taken steps towards

development

a fragrance line and had not been threatened with

litigation by

the

emptive.

PRL

Part

However, unlike

s.

The

suit

=-==-:.:..L---=...:::....::.~=-=-

14

t

was

certainly pre­

there is no basis in

the record to conclude that the USPA Part
wring an agreement

from the

s were attempting to
Whether due

PRL Parties.

2006

jury verdict

(or,

given the similarity of the marks and history between the

parties,

in the USPA Parties'

probability)

against

them,

initiat

or

that

for

the

some

PRL

other

Parties
reason,

The USPA Parties'

their suit.

favor,

to the

the possibility

would
the

USPA

had

conducted

a

increased the PRL Parties'

study

on

costs.

that

action
Parties'

subsequent stipulation

not to sell its fragrances in blue trade dress,
Parties

t

after the PRL

packaging,

no

doubt

Litigation is by its nature

tumultuous, and nothing in the foregoing suffices to warrant the
imposition of attorneys' fees here.
arguments

alleging

a

pleadings

and

the

that

The PRL Parties' additional

misrepresentation
aintiffs

could

the
not

USPA

verify

Parties'
that

all

es of the blue packaged produces after March 2010 had stopped
do not change this result.

The award of attorneys'
reserved for

fees in a trademark action is

the extraordinary case,

and the determinat ion

what justifies that extraordinary relief is necessarily a matter
of judgment.

Juicy Couture,

Conopco,

v.

1996) i

Inc.

2006 WL 2591478,

Campbell Soup Co.,

at *7;

95 F.3d 187,
Blue

Coral

194

Inc.,

~~~~~==~~~~~~~~~~~~~----~~~-----

1532, 1543 (2d Cir. 1992).

see also
(2d Cir.
968

F.2d

Were the USPA Parties to be found to

15

violate the broad injunction against future infringement that is
issued

in

conjunction

wi

this

opinion,

a

different

result

might be warranted.

Conclusion

For

the

reasons

set

forth

above,

the

PRL

motions for attorneys' fees are denied.

It is so ordered.
..

..

~

~)

~
,/

~-

~ :r:e..e2
ROBERT W. SWEET

New York, NY
March
I , 2012

U.S.D.J.

16

Parties'