River Light V, L.P. et al v. Lin & J International, Inc et al
Filing
104
OPINION & ORDER. Defendants March 31, 2014 motion for leave to file their Second Amended Answer with Counterclaim is granted in part. LJ Brand, Inc. and NJ Lin & J International, Inc. shall answer the Second Amended Complaint within fourteen days. Lin & J International, Inc. and Youngran Kim shall file and serve their Proposed Answer by the same date; their request for leave to file an amended counterclaim is denied. No further amendments to the pleadings, by any party, shall be permitted after that date. (Signed by Judge Denise L. Cote on 6/24/2014) (gr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
RIVER LIGHT V, L.P. and TORY BURCH
:
LLC,
:
:
Plaintiffs,
:
:
-v:
:
LIN & J INTERNATIONAL, INC., YOUNGRAN :
KIM, LJ BRAND, INC., and NJ LIN & J
:
INTERNATIONAL, INC.,
:
:
Defendants.
:
:
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13 Civ. 3669 (DLC)
OPINION & ORDER
APPEARANCES:
For plaintiffs:
Natalie L. Arbaugh
Fish & Richardson PC
1717 Main St., Ste. 5000
Dallas, TX 75201
Irene E. Hudson
Fish & Richardson PC
601 Lexington Ave., 52nd Fl.
New York, NY 10022
For defendants:
Howard Z. Myerowitz
Song Law Firm LLC
400 Kelby St., 7th Fl.
Fort Lee, NJ 07024
DENISE COTE, District Judge:
Defendants move for leave to file an amended answer and
amended counterclaims that add a counterclaim seeking a
declaration of invalidity as to one of plaintiffs’ copyrights.
For the reasons given below, leave to add the counterclaim is
denied.
BACKGROUND
Plaintiffs River Light V, L.P. and Tory Burch LLC (“Tory
Burch”) bring this action for trademark counterfeiting,
trademark and copyright infringement, trademark dilution, and
unfair competition, alleging that defendants sell jewelry
bearing certain designs trademarked by Tory Burch.
filed their initial complaint on May 31, 2013.
Plaintiffs
Defendants Lin &
J International, Inc. (“Lin & J”) and Youngran Kim (“Kim”)
answered on July 18 and interposed counterclaims for trademark
infringement, tortious interference with business relations, and
defamation.
Defendants allege that they have used their design
(the “Isis Cross Design”) since 2009 and a predecessor mark
since 2003, and that plaintiffs have wrongfully threatened and
initiated litigation against defendants’ customers.
Defendants
amended their answer and counterclaims on August 29, adding a
counterclaim for abuse of process.
On consent, and with leave of Court, plaintiffs filed a
first amended complaint on February 11, 2014 that added a claim
for infringement of a second copyright, U.S. Reg. No. VA 1-880129 (the “Second Copyright”), which was issued after the filing
of the initial complaint.
Defendants answered the first amended
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complaint on February 27 and restated their counterclaims, but
did not add a counterclaim asserting the invalidity of the
Second Copyright.
On March 4, with defendants’ consent and leave of Court,
plaintiffs filed a second amended complaint (the “Second Amended
Complaint”) that added as defendants two Lin & J affiliates, LJ
Brand, Inc. and NJ Lin & J International, Inc. (the “New LJ
Defendants”).
The Second Amended Complaint also added certain
supplemental allegations that are not at issue here.
On March 10, defendants sought plaintiffs’ consent to file
an “amended” answer and counterclaims.
On March 26, plaintiffs
informed defendants they would not consent to the inclusion of a
counterclaim addressed to the validity of the Second Copyright.
On March 31, defendants moved for leave to file a “Second
Amended Answer With Counterclaim” (“Proposed Answer” and
“Proposed Counterclaim,” respectively) in order to make certain
minor corrections to their answer and to add a counterclaim
seeking a declaration of invalidity of plaintiffs’ Second
Copyright.
No defendant has yet answered the Second Amended
Complaint.
Although the notice of motion states that all
defendants bring this motion, the proposed amended pleading
states it is only on behalf of defendants Lin & J and Kim, not
the New LJ Defendants.
The New LJ Defendants had until May 12
to answer or otherwise respond to the Second Amended Complaint,
3
pursuant to a waiver of service executed with plaintiffs.
No
such filing has been made.
The Proposed Counterclaim alleges that “[t]he dates of
creation and first use in commerce of the Isis Cross Design both
significantly predate the dates of creation and first use in
commerce” of the design claimed by plaintiffs’ Second Copyright
(the “TT Split Design”).
It further alleges that the TT Split
Design is “confusingly similar and/or substantially
indistinguishable from the Isis Cross Design” and that
plaintiffs have employed it “so as to create a likelihood of
confusion between Lin & J’s Isis Cross products and Tory Burch’s
products.”
Plaintiffs oppose defendants’ motion with respect to the
Proposed Counterclaim, arguing that it would be futile.
Plaintiffs do not oppose defendants’ request to file the
Proposed Answer.
Defendants’ motion was fully submitted on May
6.
Fact discovery in this action closed on April 25.
Expert
discovery ends on July 25, and any motion for summary judgment
is due September 6.
DISCUSSION
Pursuant to Federal Rule of Civil Procedure 15, a response
to an amended pleading is due within the time remaining to
respond to the original pleading or within fourteen days after
4
service of the amended pleading, whichever is later.
Civ. P. 15(a)(3).
Fed. R.
A defendant that has timely waived service
may answer or otherwise respond to a complaint within sixty days
after the request for waiver was sent.
12(a)(1)(A)(ii).
Fed. R. Civ. P.
Compulsory counterclaims must be stated in
responsive pleadings; defendants have a right to include
permissive counterclaims, as well.
Fed. R. Civ. P. 13.
Pursuant to Rule 15, “[a] party may amend its pleading once
as a matter of course” within twenty-one days after service or
twenty-one days after service of any responsive pleading.
R. Civ. P. 15(a)(1).
Fed.
Courts in this Circuit have split as to
whether an amended complaint gives a defendant who has answered
a previous complaint a new opportunity to file any counterclaims
as a matter of right, or whether such amendments as of right
must be limited to new issues raised by the amended complaint.
See Christians of California, Inc. v. Clive Christian Furniture
Ltd., 2014 WL 982889, at *2 (S.D.N.Y. Mar. 11, 2014).
Any other amendment requires the opposing party’s written
consent or leave of court.
Rule 15 instructs that “[a] court
should freely give leave [to amend] when justice so requires.”
Fed. R. Civ. P. 15(a)(2); accord Grullon v. City of New Haven,
720 F.3d 133, 139 (2d Cir. 2013).
While this rule is founded on
a “policy in favor of granting leave to amend,” Jaser v. N.Y.
Prop. Ins. Underwriting Ass’n, 815 F.2d 240, 243 (2d Cir. 1987),
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a motion to amend may be denied for “futility, bad faith, undue
delay, or undue prejudice to the opposing party.”
Doninger v.
Niehoff, 642 F.3d 334, 357 (2d Cir. 2011) (citation omitted).
“Futility is a determination, as a matter of law, that proposed
amendments would fail to cure prior deficiencies or to state a
claim under Rule 12(b)(6).”
Lotes Co., Ltd. v. Hon Hai
Precision Indus. Co., --- F.3d ---, 2014 WL 2487188, at *18 (2d
Cir. June 4, 2014) (citation omitted).
“Where it appears that
granting leave to amend is unlikely to be productive, . . . it
is not an abuse of discretion to deny leave to amend.”
Lucente
v. Int’l Bus. Machs. Corp., 310 F.3d 243, 258 (2d Cir. 2002)
(citation omitted).
When determining whether allegations would withstand a
motion to dismiss under Rule 12(b)(6), a court must accept as
true all allegations in the complaint and draw all reasonable
inferences in the plaintiffs’ favor.
Keiler v. Harlequin
Enters. Ltd, --- F.3d ---, 2014 WL 1704474, at *3 (2d Cir. May
1, 2014).
To survive a motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face.”
Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citation omitted).
The court
is “not bound to accept as true a legal conclusion couched as a
factual allegation.”
Id. (citation omitted).
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Accordingly, a
court may disregard “[t]hreadbare recitals of the elements of a
cause of action, supported by mere conclusory statements.”
Id.
Applying the plausibility standard is “a context-specific
task that requires the reviewing court to draw on its judicial
experience and common sense.”
Id. at 679.
depends on a host of considerations:
“Plausibility
the full factual picture
presented by the complaint, the particular cause of action and
its elements, and the existence of alternative explanations so
obvious that they render plaintiff's inferences unreasonable.”
Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013)
(citation omitted).
Although the focus should be on the
pleadings in considering a motion to dismiss, the court will
deem the complaint to include “any written instrument attached
to it as an exhibit, materials incorporated in it by reference,
and documents that, although not incorporated by reference, are
‘integral’ to the complaint.”
L-7 Designs, Inc. v. Old Navy,
LLC, 647 F.3d 419, 422 (2d Cir. 2011) (citation omitted).
I.
The New LJ Defendants
The parties do not address the fact that the New LJ
Defendants have never answered the Second Amended Complaint.
The Court construes the instant motion, as to the New LJ
Defendants, as a motion for extension of time to answer or
otherwise respond to the Second Amended Complaint.
The Court
grants New LJ Defendants fourteen days from the date of this
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Opinion to file a responsive pleading.
No pleadings may be
amended -- by any party -- after this date.
II.
Lin & J and Kim
Lin & J and Kim were required to file an answer to the
Second Amended Complaint within fourteen days of service.
The
Court construes their instant motion, with respect to the
Proposed Answer, as a motion for extension of time.
Because
this motion was brought ten days after this time expired, Lin &
J and Kim must establish that they “failed to act because of
excusable neglect.”
Fed. R. Civ. P. 6(b)(1)(B).
In determining
whether excusable neglect has been shown, courts are to consider
four factors:
(1) the danger of prejudice to the party opposing
the extension; (2) the length of the delay and its
potential impact on judicial proceedings; (3) the
reason for the delay, including whether it was
within the reasonable control of the party seeking
the extension; and (4) whether the party seeking the
extension acted in good faith.
In re American Express Fin. Advisors Sec. Litig., 672 F.3d 113,
129 (2d Cir. 2011) (citation omitted).
“[T]he ultimate
determination depends upon a careful review of all relevant
circumstances.”
Id. (citation omitted).
Here, excusable neglect has been shown.
The length of the
delay, ten days, is relatively small, and there is no impact on
these proceedings.
The reason for the delay, in particular,
supports an extension, as Lin & J and Kim sought consent from
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plaintiffs to file these pleadings six days after the Second
Amended Complaint was filed; it took plaintiffs sixteen days to
decide not to consent, during which time Lin & J and Kim’s time
to file an answer in response to the Second Amended Complaint
expired.
Less than a week later, Lin & J and Kim brought the
instant motion for leave.
in good faith.
Finally, Lin & J and Kim have acted
Accordingly, Lin & J and Kim are granted leave
to file the Proposed Answer within fourteen days from the date
of this Opinion.
Leave is denied, however, with respect to Lin & J and Kim’s
request to add the Proposed Counterclaim.
untimely and it would be futile. 1
The request is
Lin & J and Kim contend that
they have adequately alleged that the TT Split Design is not
“original” and therefore not eligible for copyright protection.
They have not.
It is true that, “[t]o qualify for copyright protection, a
work must be original -- that is, it must be independently
created by the author and possess at least some minimal degree
of creativity.”
Scholz Design, Inc. v. Sard Custom Homes, LLC,
Whatever right Lin & J and Kim had to timely amend their
counterclaims after plaintiffs filed the Second Amended
Complaint, the period for such amendment expired before the
instant motion was filed. Lin & J and Kim do not contend that
they may amend as of right, and the Court declines to construe
the instant motion as a motion to extend Lin & J’s and Kim’s
time to file the Proposed Counterclaim.
1
9
691 F.3d 182, 186 (2d Cir. 2012) (citation omitted).
But,
“[o]riginality does not signify novelty; a work may be original
even though it closely resembles other works so long as the
similarity is fortuitous, not the result of copying.”
Yurman
Design, Inc. v. PAJ, Inc., 262 F.3d 101, 110 (quoting Feist
Publications, Inc. v. Rural Telephone Serv. Co., Inc., 499 U.S.
340, 345 (1991)).
Thus, if “two poets, each ignorant of the
other, compose identical poems, . . . both are original and,
hence, copyrightable.”
Christian Louboutin S.A. v. Yves Saint
Laurent America Holdings, Inc., 696 F.3d 206, 224 n.20 (2d Cir.
2012) (quoting Feist, 499 U.S. at 346).
Defendants’ Proposed Counterclaim alleges that the Isis
Cross Design predated the TT Split Design and that the two are
“confusingly similar and/or substantially indistinguishable,”
but defendants do not allege that Tory Burch actually copied the
Isis Cross Design.
Defendants do not even allege that Tory
Burch was aware of the Isis Cross Design until after the TT
Split Design was created.
As a result, they have failed to
plead a claim of invalidity.
In their reply, defendants do not request an opportunity to
amend their Proposed Counterclaim.
Instead, defendants argue
that they “clearly claim that [the TT Split Design] is, in fact,
a copy of the Isis Cross Design.”
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To the extent defendants mean
that they have alleged actual copying, they are mistaken. 2
Defendants’ allegations that plaintiffs have used the TT Split
Design in such a way “as to create a likelihood of confusion
between Lin & J’s Isis Cross products and Tory Burch’s
products,” and that plaintiffs have willfully infringed
defendants’ trademark, do not concern the manner in which the TT
Split Design was created and so do not adequately plead actual
copying.
Indeed, defendants effectively concede this point when
they admit that they have not alleged that plaintiffs
fraudulently misrepresented authorship of the TT Split Design to
the Copyright Office.
Although substantial similarity of two
products may be probative of actual copying, see Zalewski v.
Cicero Builder Dev., Inc., --- F.3d ---, 2014 WL 2521388, at *3
(2d Cir. June 5, 2014), and may in some circumstances provide a
good faith basis for an allegation of actual copying, it is not
a substitute for such an allegation. 3
Accordingly, Lin & J and
Defendants’ statement that they claim plaintiffs’ design “is,
in fact, a copy of the Isis Cross Design” is ambiguous as to
whether defendants contend there was actual copying. The later
poem hypothesized in Feist may be said to be a “copy” of the
earlier, even though its poet generated it independently, and
not through copying.
2
For the plaintiffs to succeed on their claim of copyright
infringement, plaintiffs will have to show that they possess a
valid copyright. As a consequence, the parties will have an
opportunity to litigate the validity of the Second Copyright in
the context of the plaintiffs’ claim of infringement.
3
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Kim’s request for leave to amend their counterclaims by adding
the Proposed Counterclaim is denied as untimely and as futile.
CONCLUSION
Defendants’ March 31, 2014 motion for leave to file their
Second Amended Answer with Counterclaim is granted in part.
LJ
Brand, Inc. and NJ Lin & J International, Inc. shall answer the
Second Amended Complaint within fourteen days.
Lin & J
International, Inc. and Youngran Kim shall file and serve their
Proposed Answer by the same date; their request for leave to
file an amended counterclaim is denied.
No further amendments
to the pleadings, by any party, shall be permitted after that
date.
SO ORDERED:
Dated:
New York, New York
June 24, 2014
____________________________
DENISE COTE
United States District Judge
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