Juicy Couture Inc. v. Bella International Limited et al

Filing 39

OPINION AND ORDER: re: 4 MOTION for Preliminary Injunction. filed by Juicy Couture Inc. For the reasons that are set forth in this Order, Plaintiffs motion or a preliminary injunction is granted in part and denied in part. Plaintiff is directed to submit a proposed order consistent with this Opinion by March 22, 2013. By March 18, 2013, the parties shall also submit individual letters, no longer than two pages, addressing the appropriate security to be posted by Plaintiff. (Signed by Judge Ronnie Abrams on 3/12/2013 ) (Attachments: # 1 Supplement Part 2, # 2 Supplement Part 3, # 3 Supplement Part 4, # 4 Supplement Part 5)(pl) Modified on 3/13/2013 (pl).

briefed and limited discovery was conducted, the Court held an evidentiary hearing and heard
oral argument on February 14, 2013. 5
II.

Preliminary Injunction Standard

"A preliminary injunction is an extraordinary remedy." Winter v. Natural Res. Def.
Council, 555 U.S. 7, 24 (2008). A party seeking a preliminary injunction must show: (1) a
likelihood of success on the merits; (2) a likelihood of irreparable harm in the absence of the
injunction; (3) that the balance of hardships tips in the movant's favor; and (4) that the public
interest is not disserved by the issuance of the injunction. Salinger v. Colting, 607 F.3d 68, 7980 (2d Cir. 2010); Bulman v. 2BKCO, Inc., 882 F. Supp. 2d 551, 557 (S.D.N.Y. 2012). A court
can also grant a preliminary injunction "in situations where it cannot determine with certainty
that the moving party is more likely than not to prevail on the merits of the underlying claim, but
where the costs outweigh the benefits of not granting the injunction." Citigroup Global Mkts.,
Inc. v. VCS Special Opportunities Master Fund Ltd., 598 F.3d 30, 35 (2d Cir. 201 0). The party
seeking the injunction must demonstrate "by a clear showing" that the necessary elements are
satisfied. Mazurek v. Armstrong, 520 U.S. 968, 972 (1997).

In their opposition brief and at the evidentiary hearing, Defendants referenced the parties' settlement
discussions. (Defs.' Opp ' n 7-8; Tr. 7-8.) Federal Rule of Evidence 408 bars the use of settlement evidence to
establish the validity or invalidity of a claim but permits the admission of such evidence if offered for another
purpose. See Starter Com. v. Converse, Inc., I 70 F.3d 286, 293 (2d Cir. I 999). Defendants assert that the evidence
should not be excluded by Rule 408 because it provides a "procedural context" for "why ... [P]Iaintiff chose to
bring a U.S. action four years after starting an action in Hong Kong" and is not offered to prove the invalidity of
Plaintiffs claim. (Tr. 14.) The Court rejects this argument and finds in any event, that the evidence's probative
value is outweighed by the danger of unfair prejudice pursuant to Rule 403. See Sanders v. Madison Square
Garden, LP, 525 F. Supp. 2d 364, 368 (S.D.N.Y. 2007) ("[E]ven if the evidence is not excluded defmitively by Rule
408, like any evidence it must pass Rule 403's test."); see also Trebor Sportswear Co. v. The Limited Stores, Inc.,
865 F.2d 506, 510- I I (2d Cir. 1989) ("As a general proposition, a trial court has broad discretion as to whether to
admit evidence of settlement negotiations offered for 'another purpose."'). Accordingly, all references to the
parties' settlement discussions and positions are to be stricken from the record.

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III.

Discussion
A. Likelihood of Success on the Merits
In arguing its likelihood of success on the merits, Plaintiff principally relies on its claim

for trademark infringement pursuant to Section 32 of the Lanham Act. 6 Section 32(a) of the
Lanham Act prohibits the use in commerce, without consent, of any "registered mark in
connection with the sale, offering for sale, distribution, or advertising of any goods," in a way
that is likely to cause confusion. 15 U.S.C. § 1114(1)(a). To prevail on an infringement action, a
plaintiff must demonstrate: (1) "that it has a valid mark entitled to protection," and (2) "that the
defendant's use of that mark is likely to cause confusion." Time, Inc. v. Petersen Publ ' g Co.
LLC, 173 F.3d 113, 117 (2d Cir. 1999); Chloe v. Queen Bee of Beverly Hills, LLC, No. 06 Civ.
3140 (RJH), 2011 WL 3678802, at *3 (S.D.N.Y. Aug. 19, 2011).
Courts look to the following factors, enumerated in Polaroid Corp. v. Polarad Elecs.
Com., 287 F .2d 492 (2d Cir. 1961 ), to determine whether a likelihood of confusion exists
between two sets of marks: (1) the strength of the 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. Id. at 495. " [E]ach factor must be evaluated in the context of how it bears on the
ultimate question of likelihood of confusion as to the source of the product." Brennan' s Inc. v.
Brennan' s Rest., LLC, 360 F.3d 125, 130 (2d Cir. 2004) (quoting Lois Sportswear, U.S.A., Inc.
Because the Court grants a preliminary injunction based on Plaintiff's infringement claim and finds this
remedy to be sufficient to cure the irreparable harm to Plaintiff, the Court need not address Plaintiff's cybersquatting
claim as it pertains to Defendants ' U.S. based websites, counterfeiting claim, or unfair competition claim. The
Court does not address Plaintiff's cybersquatting claim as it pertains to the HK Website because, as discussed below,
the Court declines to exercise jurisdiction over that foreign website.

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v. Levi Strauss & Co., 799 F.2d 867, 872 (2d Cir. 1986)). Because the analysis for the first
prong of an infringement claim-whether a trademark is valid and entitled to protectionoverlaps with the analysis used to assess the first Polaroid factor-strength of Plaintiffs markthe Court discusses the strength and validity of the Juicy Marks together. See Arrow Fastener
Co., Inc. v. Stanley Works, 59 F.3d 384, 391 (2d Cir. 1995) ("A court' s inquiry regarding the
strength of a mark often parallels the inquiry concerning the mark' s validity, inasmuch as the
strength or distinctiveness of a mark determines both the ease with which it may be established
as a valid trademark and the degree of protection it will be accorded.") (citations and internal
quotation marks omitted).
1. Validity and Strength of Plaintiff's Marks

"The strength of a particular mark is measured by the degree to which it indicates source
or origin of the product." Nora Beverages, Inc. v. Perrier Grp. of Am., Inc., 269 F.3d 114, 123
(2d Cir. 2001).

A mark' s strength may be based on its inherent distinctiveness or the

distinctiveness it has acquired in the marketplace.

See Brennan' s, 360 F.3d at 130-31.

Registered marks are presumptively distinctive, although this can be overcome by showing that a
registered mark is generic or is descriptive without secondary meaning. Abercrombie & Fitch
Co. v. Hunting World, Inc., 537 F.2d 4, 11 (2d Cir. 1976); Giggle, Inc. v. netFocal, Inc., 865 F.
Supp. 2d 625, 629-30 (S.D.N.Y. 2012).

"[W]hen a plaintiff sues for infringement of its

registered mark, the defendant bears the burden to rebut the presumption of [the] mark' s
protectibility by a preponderance of the evidence." Lane Capital Mgmt., Inc. v. Lane Capital
Mgmt., Inc., 192 F.3d 337, 345 (2d Cir. 1999). Defendants have not presented any evidence that
the presumption is inapplicable in this instance.

Accordingly, the Juicy Marks "should be

afforded the utmost protection." Lois Sportswear, 799 F.2d at 871.

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Furthermore, Plaintiff has demonstrated that these marks have acquired distinctiveness.
In determining whether a mark has acquired distinctiveness, courts consider a number of nonexhaustive factors: (1) advertising expenditures; (2) sales success; (3) unsolicited media
coverage of the product; (4) attempts to plagiarize the mark; (5) the length and exclusivity of the
mark ' s use ; and (6) consumer studies linking the name to the source. See Thompson Med. Co.,
Inc. v. Pfizer Inc. , 753 F.2d 208 , 217 (2d Cir. 1985). No one factor is determinative, and not all
factors need to be proved. L & JG Stickley, Inc. v. Canal Dover Furniture Co., Inc. , 79 F.3d 258,
263 (2d Cir. 1996). Plaintiff has spent " hundreds of millions of dollars on advertising and
promoting goods and services offered in connection with the Juicy Marks" and Juicy products
generated over $1.5 billion in sales from 2009 through 2011 alone. (Samuelson Decl.

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10-13.)

Plaintiff has also been the subject of widespread media coverage, both solicited and unsolicited.
Its products, including but not limited to its "signature" velour tracksuit, have been used in
popular movies, television shows and print media, and have been worn by a long list of
Hollywood celebrities. (I d. at ~ 10.)
Given the degree of protection afforded to registered marks and the acquired
distinctiveness of the Juicy Marks, the marks are valid and deserving of protection, satisfying the
first element of an infringement claim, and are strong marks, providing persuasive support for a
finding of a likelihood of confusion under the first Polaroid factor.

2.

The Similarity of the Marks

When evaluating the similarity of marks, "courts look to the overall impression created
by the [marks] and the context in which they are found and consider the totality of factors that
could cause confusion among prospective purchasers." Gruner + Jahr USA Publ ' g v. Meredith
Corp., 991 F.2d 1072, 1078 (2d Cir. 1993). Defendants ' marks, JUICY GIRL, JUICYLICIOUS

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