Nespresso USA, Inc. v. Africa America Coffee Trading Co. LLC

Filing 29

MEMORANDUM OPINION AND ORDER re: 21 MOTION for Default Judgment as to Africa America Coffee Trading Co. LLC D/B/A Libretto filed by Nespresso USA, Inc.: For the foregoing reasons, Nespresso's motion for default judgment is granted in part and denied in part. The Court denies Nespresso's motion with respect to its Second Cause of Action for false designation or origin pursuant to 15 U.S.C. § 1125(d). The motion is granted in all other respects, and the Court grants Nespresso the relief it seeks in the form of an Order: (1) permanently enjoining Defendant Libretto, its agents, servants, employees, officers and all persons in active concern and participation with them: (a) from using the Nespresso Marks (as defined in the Complaint) or any marks similar thereto in connection with the manufacture, distribution, advertising for sale, promotion or sale of any unauthorized goods or services, including the manufacture, distribution, advertisement , promotion, holding for sale or selling of the Libretto Capsules (as defined in the Complaint) and in the meta tags of any websites dedicated to the same (including <librettoespresso.com>); (b) from using the Nespresso Trade Dress (as defin ed in the Complaint) or any trade dress similar thereto in connection with the manufacture, distribution, advertising for sale, promotion or sale of any unauthorized goods or services, including the manufacture, distribution, advertisement, promoti on, holding for sale or selling of the Libretto Capsules; (c) from using any logo, trade name, trademark or trade dress which may be calculated to falsely represent or which has the effect of falsely representing that the services or products of L ibretto are sponsored by, authorized by or in any way associated with the Plaintiff Nespresso or the Nespresso brand; (d) from infringing Plaintiff Nespresso's exclusively licensed trademarks and trade dress; and (e) from falsely representing themselves as being connected with, sponsored by or associated with Plaintiff Nespresso or the Nespresso brand; (2) ordering the destruction of all unauthorized goods, bearing any copy or colorable imitation of the Nespresso Marks or the Nespress o Trade Dress, including the Libretto Capsules; (3) finding that, by the acts complained of by Nespresso as set forth in the Complaint, Defendant Libretto has infringed Nespresso's exclusively licensed federally registered trademarks in violat ion of 15 U.S.C. § 1114; (4) finding that, by the acts complained of by Nespresso as set forth in the Complaint, Defendant Libretto has created a false designation of origin and false representation of association and has infringed the Nespress o Marks and the Nespresso Trade Dress in violation of 15 U.S.C. § 1125(a); and (5) finding that, the acts complained of by Nespresso as set forth in the complaint, constitute willful infringement of the Nespresso Marks and the Nespresso Trade Dress. The Court will sign and enter the Proposed Default Judgment (see Docket Entry No. 22-4) concurrently with the filing of this Memorandum Opinion and Order. This Memorandum Opinion and Order resolves Docket Entry Number 21. The Clerk of Court is respectfully requested to enter judgment in Plaintiff's favor and close this case. (Signed by Judge Laura Taylor Swain on 6/2/2016) (tn)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------x
NESPRESSO USA, INC.,
Plaintiff,
-v-

No. 15CV5553-LTS

AFRICA AMERICA COFFEE TRADING
CO. LLC D/B/A LIBRETTO,
Defendants.
-------------------------------------------------------x
MEMORANDUM OPINION AND ORDER
In this infringement action, Plaintiff Nespresso USA, Inc. (“Nespresso” or
“Plaintiff”), asserts that Defendant Africa America Coffee Trading Co. LLC d/b/a Libretto
(“Libretto” or “Defendant”), infringed Plaintiff’s trademark and trade dress, and engaged in unfair
competition, in violation of both the Lanham Act and New York state law. The Court has subject
matter jurisdiction of this action pursuant to 28 U.S.C. §§ 1331, 1338, and 1367.
Plaintiff now moves, pursuant to Federal Rule of Civil Procedure 55(b)(2), for a
default judgment against Defendant. Plaintiff seeks a judgment on the merits against Defendant as
to each of its Causes of Action, a permanent injunction barring Defendant’s use of the Nespresso
trademark and trade dress, and destruction of any of Defendant’s remaining inventory that utilizes
the Nespresso trademark or trade dress. Defendant has failed to appear in this action and has not
opposed the instant motion. The Court has carefully reviewed Plaintiff’s motion and, for the
reasons stated herein, the motion for default judgment is granted in part and denied in part.

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BACKGROUND1
Plaintiff Nespresso is a well-known espresso and coffee machine producer, and the
exclusive licensee of the federally registered trademark “Nespresso.” (Docket Entry No. 1, Compl.
¶ 9, see also Ex. B (Nespresso Trademarks).) Nespresso also makes and sells espresso capsules for
use with its espresso machines. (Id.) Nespresso’s capsules have a cone-shaped bottom surface and
are sold in long, thin, rectangular packaging. (Id., Ex. A (Nespresso Packaging).)
Defendant Libretto was founded in or around January 2014. (Id. ¶ 11.) Libretto
also manufactures espresso capsules, which are compatible with Nespresso machines. (Id.) While
Libretto’s capsules are made of plastic and Nespresso’s are made of aluminum, the capsules are
otherwise similar in size, shape, and color. (Id. ¶ 15-16, Fig. 6-9.) Libretto capsules are also sold
in long, thin, rectangular boxes, similar to those in which Nespresso capsules are sold. (Id. ¶ 14,
Fig. 4.) The lower right-hand corner of Libretto’s boxes features a red and white text box that
reads “Nespresso® compatible,” with the word “Nespresso” written in a highly stylized manner.
(Id.) The same “Nespresso® compatible” text box can be found on Libretto’s website. (Id.,
Fig. 5.)2 Libretto sells (or sold) its products through its website and through other online merchants
such as Amazon.com. (Id. ¶ 12.) Libretto also uses the word “Nespresso” as a metatag in the
source code for its website. (Id. ¶ 13, see Fig. 3.)
Believing that Libretto’s product infringed on its trademark and trade dress,

1

The facts recited herein are drawn from Plaintiff’s Complaint (“Compl.”) in this
action. In light of Defendant’s failure to respond to the Complaint, Plaintiff’s
well-pleaded factual allegations are deemed admitted for purposes of this motion
practice. See Fed. R. Civ. P. 8(b)(6); Greyhound Exhibitgroup, Inc. v. E.L.U.L.
Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) (“[A] party’s default is deemed to
constitute a concession of all well pleaded allegations of liability.”)

2

Libretto’s website, librettoespresso.com, is no longer accessible. It is therefore
not clear to the Court whether the company continues to operate.

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Nespresso attempted to contact Libretto on May 7, June 9 and July 11 of 2014, to request that it
stop producing and selling Libretto espresso capsules. (Compl. ¶ 2.) After receiving no response,
Nespresso filed its Complaint on July 16, 2015, asserting six Causes of Action against Libretto: (1)
trademark infringement under the Lanham Act, 15 U.S.C. § 1114(1); (2) false designation of origin
under the Lanham Act, 15 U.S.C. § 1125(d); (3) false designation of origin under the Lanham Act,
15 U.S.C. § 1125(a); (4) trade dress infringement under the Lanham Act, 15 U.S.C. § 1125(a); (5)
unlawful deceptive acts and practices under New York General Business Law § 349(a); and (6)
common law unfair competition. (See generally id. ¶¶ 20-80.) Nespresso served Libretto with the
Summons and Complaint on September 29, 2015. (See Docket Entry No. 13.) Libretto has since
failed to appear in this action. On November 2, 2015, this Court granted Nespresso permission to
move for default judgment. (See Docket Entry No. 15.) On November 10, 2015, Libretto was
served with notice of the Court’s order permitting default judgment motion practice. (See Docket
Entry No. 17.) The Clerk of the Court issued a certificate of default against Libretto on November
19, 2015 (see Docket Entry No. 20), and Nespresso thereafter filed the instant motion for default
judgment. (Docket Entry No. 21.) Nespresso’s motion is accompanied by evidentiary proffers and
exhibits supporting its claims, as well as a memorandum of law. (Docket Entry Nos. 22, 23.)

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DISCUSSION
Default Judgment Standard
In determining whether to grant a motion for default judgment, a court within this
district considers three factors: “(1) whether the defendant’s default was willful; (2) whether
defendant has a meritorious defense to plaintiff’s claims; and (3) the level of prejudice the nondefaulting party would suffer as a result of the denial of the motion for default judgment.”
Indymac Bank, F.S.B. v. National Settlement Agency, Inc., No. 07CV6865-LTS-GWG, 2007 WL
4468652, at *1 (S.D.N.Y. Dec. 20, 2007) (internal citation omitted); see also Guggenheim Capital,
LLC v. Birnbaum, 722 F.3d 444, 455 (2d Cir. 2013) (applying these factors in review of lower
court grant of a default judgement). Once the court finds that these factors favor the plaintiff, it
must determine whether the plaintiff has pleaded facts supported by evidence sufficient to establish
the defendant’s liability with respect to each cause of action. See Au Bon Pain Corp. v. Artect,
Inc., 653 F.2d 61, 65 (2d Cir. 1981). The Court finds that all three factors articulated by the Court
in Indymac weigh in Nespresso’s favor.3
Nespresso’s First Cause of Action: Trademark Infringement
“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 . . . The Act similarly prohibits the infringement

3

Libretto’s non-appearance and failure to respond to Nespresso’s Complaint or
Motion to Dismiss indicates willful conduct. Indymac Bank, F.S.B., 2007 WL
4468652, at *1 (holding that non-appearance and failure to respond to a
Complaint or Motion for Default Judgment indicates willful conduct.). With
respect to the second factor, because Libretto has failed to appear in this action,
the Court is unable to determine whether it might be able to present any
meritorious defense to Nespresso’s claims. Finally, the Court finds that
Nespresso will be prejudiced if it is unable to defend the integrity of its trademark
and trade dress in light of Libretto’s default in this case.

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of unregistered, common law trademarks.” Time, Inc. v. Petersen Pub. Co. LLC, 173 F.3d 113,
117 (2d Cir. 1999) (citing 15 U.S.C. §§ 1114(1)(a), 1125(a)(1)). Nespresso’s First Cause of Action
alleges that Libretto committed trademark infringement in violation of the Lanham Act, 15 U.S.C.
§ 1114(1), by using the registered “Nespresso” mark in connection with the manufacture, offering
for sale, and sale of Libretto’s espresso capsules. In order to prove infringement under the Lanham
Act § 1114(1), Nespresso must show that it possesses a valid mark that is entitled to protection and
that Libretto’s use of the mark is likely to cause confusion. Time, Inc., 173 F.3d at 117. In
addition, the Second Circuit has recognized the concept of nominative use, which “involves [the
defendant] using the mark at issue as a mark to specifically invoke the mark-holder’s mark, rather
than [using it] other than as a mark, to describe the alleged infringer’s goods or services.”
International Information Systems Sec. Certification Consortium, Inc. v. Security University, LLC,
No. 14-3456-CV, 2016 WL 2893172, at *12 (2d Cir. May 18, 2016) (emphasis in original). The
Second Circuit has held that, in such cases, “in addition to discussing each of the Polaroid factors,
courts are to consider: (1) whether the use of the plaintiff’s mark is necessary to describe both the
plaintiff’s product or service and the defendant's product or service, that is, whether the product or
service is not readily identifiable without use of the mark; (2) whether the defendant uses only so
much of the plaintiff’s mark as is necessary to identify the product or service; and (3) whether the
defendant did anything that would, in conjunction with the mark, suggest sponsorship or
endorsement by the plaintiff holder, that is, whether the defendant’s conduct or language reflects
the true or accurate relationship between plaintiff’s and defendant’s products or services.”
International Information Systems, 2016 WL 2893172, at *13.
As an initial matter, Nespresso has proffered uncontroverted evidence that it owns
the exclusive license to use of the word mark Nespresso, which is a registered trademark. (Compl.,
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Ex. B.). Federal registration of a mark constitutes prima facie evidence of the mark’s validity.
Lane Capital Management, Inc. v. Lane Capital Management, Inc, 192 F.3d 337, 345 (2d Cir.
1999). Thus, Nespresso has demonstrated that its mark is valid and entitled to protection. In order
to determine the likelihood of confusion, courts within the Second Circuit weigh the factors set out
in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961) (the “Polaroid
factors”). There are eight Polaroid factors, none of which is individually dispositive: (1) the
strength of the mark; (2) the similarity of the marks; (3) the proximity of the products within the
market place; (4) the likelihood plaintiff will bridge the gap between the products; (5) evidence of
actual confusion among consumers; (6) the sophistication of the relevant consumer population; (7)
the defendant’s good or bad faith; and (8) the relative quality of the products. Polaroid, 287 F.2d at
495. In this case, the majority of the Polaroid factors favor Nespresso, and the weight of these
factors on balance is sufficient to prove a likelihood of confusion.
The first Polaroid factor, the strength of the plaintiff’s mark, favors Nespresso. This
factor is concerned with the distinctiveness of a mark in the eyes of the consuming public. Savin
Corp. v. Savin Group, 391 F.3d 439, 457 (2d Cir. 2004). A federally registered mark is presumed
to be distinctive with respect to the goods or services that the registration covers. Savin Corp., 391
F.3d at 457. Nespresso has registered the mark Nespresso in association with both coffee and
coffee extracts. (Compl. at Ex. B.) Therefore, the strength of Nespresso’s mark is presumed in
this case.
The second Polaroid factor, which examines the similarity of the marks, also favors
Nespresso. Courts use this factor to determine whether the similarity of the marks is likely to cause
confusion among ordinarily prudent consumers. Id. “[T]he ‘impression’ conveyed by the setting
in which the mark is used is often of critical importance.” Id. (internal citation omitted). Here,
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Libretto uses the stylized word mark “Nespresso,” which is identical to the mark for which
Nespresso has trademark protection. Libretto uses this word mark on its packaging and website,
though its use is followed by the modifying word “compatible” (Compl. ¶ 1, Figs. 1, 4, 5, 11), and
the relative size of the phrase “Nespresso compatible” is small when compared with the size of the
word “Libretto” on Libretto’s packaging and website. (See id.) However, Libretto’s packaging
nonetheless displays the phrase “Nespresso compatible” prominently in a highly stylized font, and
in colors that make the mark stand out, particularly when compared with the more subtle use of the
brand name Libretto on the box. (Compl. ¶ 14, Fig. 4.) This use is likely to be particularly eyecatching to the consumer, arguably more so than the more subtle Libretto logo at the top of the
packaging. (Id.) Libretto’s use of the word mark Nespresso, which is identical to Nespresso’s own
mark, thus creates a likelihood of confusion, and the second Polaroid factor therefore weighs in
Nespresso’s favor.
Both the third Polaroid factor – proximity of the products in the marketplace – and
the fourth Polaroid factor – likelihood of Nespresso bridging the gap – favor Nespresso. The
“[bridging the gap] factor looks to either the likelihood that [plaintiff] will enter [defendant’s]
business or the average customer’s perception of the likelihood that the plaintiff would enter the
defendant’s market.” The Sports Authority, Inc. v. Prime Hospitality Corp., 89 F.3d 955, 963 (2d
Cir. 1996). The products offered by both Nespresso and Libretto in this case are the same:
espresso capsules. There is clear proximity in the marketplace, since both Nespresso and Libretto
operate in the same market and sell the same type of goods. Because the products offered by
Nespresso and Libretto are for all intents and purposes the same, and the market they operate in is
identical, there is no gap for Nespresso to bridge.
The fifth Polaroid factor, evidence of actual confusion, is neutral. Nespresso has
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made uncontroverted allegations of consumer confusion in its Complaint. (See Compl. ¶¶ 14, 17,
22, 36, 58.) However, no discovery has taken place in this action and Nespresso has proffered no
evidence that affirmatively demonstrates the existence of consumer confusion. Thus, the Court
finds that this factor favors neither party.
The sixth Polaroid factor, which examines the good or bad faith of the defendant
party in adopting the mark, is also neutral. This factor is meant to take into account whether a
mark has been adopted by a defendant with the intent to capitalize on the plaintiff’s reputation and
goodwill. Savin Corp., 391 F.3d at 460. The fact that Libretto had prior knowledge of Nespresso’s
use of the trademark is not necessarily indicative of bad faith. Id. However, the Court once again
notes that, while Libretto uses the Nespresso mark within the context of the statement “Nespresso
compatible,” the mark is used in a prominent, highly-stylized manner that appears to be intended to
catch the eye of the consumer. Such use appears likely to cause confusion with respect to
Nespresso’s possible endorsement of, or affiliation with, Libretto’s products, and thus weighs
against a finding of good faith. This factor is, therefore, at best neutral.
The seventh Polaroid factor, the relative quality of the products, favors Libretto.
While a marked difference in the quality between a plaintiff’s goods and a defendant’s allegedly
infringing goods is more likely to cause harm to a senior user, it is also less likely to cause
consumer confusion. Savin Corp., 391 F.3d at 461 (“A marked difference in quality . . . actually
tends to reduce the likelihood of confusion in the first instance, because buyers will be less likely
to assume that the senior user whose product is high-quality will have produced the lesser-quality
products of the junior user.”). In light of the fact that the Polaroid factors are concerned with
likelihood of confusion, id. at 456, this factor favors Libretto. Libretto advertises that its product is
made with plastic while Nespresso’s product is made with higher-quality aluminum. (Compl.
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¶ 16.) By highlighting the marked difference in quality, Libretto actually decreases the likelihood
of confusion between the products. Savin Corp., 391 F.3d at 461.
The eighth Polaroid factor, the sophistication of the relevant consumer population,
favors Nespresso. Given that this case deals with relatively inexpensive goods, the relevant
consumers are unlikely to be exceptionally sophisticated and are therefore more likely to be
confused. See Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 220 (2d Cir. 1999) (noting that
purchasers of relatively inexpensive goods are assumed to be less sophisticated and more
susceptible to confusion) (abrogated on other grounds).
After careful analysis, it is apparent that five of the eight Polaroid factors favor
Nespresso, while two of the factors are at best neutral, and only a single factor favors Libretto.
Based on the record before it, the Court concludes that Libretto used the Nespresso mark in a
manner that was likely to cause consumer confusion with respect to Nespresso’s possible
endorsement of, or affiliation with, Libretto’s products. Nespresso has thus met its burden of
demonstrating a likelihood of confusion under the Polaroid factors with respect to its First Cause of
Action.
Moreover, while the Lanham Act permits one competitor to use “another’s
registered trademark to describe aspects of one’s own goods, even to indicate that one’s product is
a legitimate copy of another’s product,” Mattel, Inc. v. Azrak-Hamway Intern., Inc., 724 F.2d 357,
361 (2d Cir. 1983); Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93, 102-03 (2d Cir. 2010) (noting that
“a defendant may lawfully use a plaintiff’s trademark where doing so is necessary to describe the
plaintiff’s product and does not imply a false affiliation or endorsement by the plaintiff of the
defendant.”), the Court finds that Libretto’s use of the Nespresso mark in this case fits the
definition of “nominative use” as set out by the Second Circuit; that is, Libretto has used the mark
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at issue “as a mark to specifically invoke [Nespresso]’s mark, rather than [in order] to describe
[Libretto]’s goods or services.” International Information Systems, 2016 WL 2893172, at *12
(emphasis in original). In such a scenario, the Court must consider the nominative fair use factors
enumerated by the Second Circuit. Id. at *13.4 Here, the Court finds that Libretto’s highly
stylized, eye-catching use of the Nespresso mark is likely to create “confusion regarding affiliation,
sponsorship, or endorsement by” Nespresso. Id., at *13. The Court further finds that, with respect
to the second nominative fair use factor, Libretto “step[ped] over the line into a likelihood of
confusion by using the [Nespresso] mark too prominently . . . in terms of . . . emphasis.” Id.
(internal quotation marks and citations omitted). Consideration of the nominative fair use factors
recognized by the Second Circuit therefore weighs heavily in favor of a finding of liability with
respect to infringement on the part of Libretto.
Based on the record before it, the Court finds that Libretto is liable for trademark
infringement and, therefore, Nespresso’s motion for default judgment with respect to its First
Cause of Action is granted.5

4

The Court recognizes that, with respect to the first nominative fair use factor
articulated by the Second Circuit, “whether the use of the plaintiff’s mark is
necessary to describe both the plaintiff's product or service and the defendant’s
product or service,” International Information Systems, 2016 WL 2893172, at
*13, it is questionable whether Libretto’s use of the Nespresso mark was
necessary in order to describe its products’ compatibility with Nespresso coffee
machines. Libretto’s Facebook site claimed that its capsules are “[a] tribute to . . .
the science at work in the machines made by Nestle® and other manufacturers”
(Compl. ¶ 16) (emphasis supplied)), suggesting that the capsules might be
compatible with a wider range of machines.

5

Nespresso’s Fifth Cause of Action is for unlawful and deceptive acts and
practices under New York General Business Law § 349(a), and its Sixth Cause of
Action asserts a claim of common law unfair competition. Analysis of claims
brought under the New York General Business Law and the common law is
substantially similar to analysis of claims asserted under the Lanham Act. Novo
Nordisk A/S v. Becton Dickinson & Co., 997 F. Supp. 470, 472 n.1 (S.D.N.Y.

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Nespresso’s Second and Third Causes of Action: False Designation of Origin
The Second Cause of Action asserted by Nespresso alleges that Libretto’s use of the
“Nespresso” mark in the metatags of Libretto’s website creates a false designation of origin in
violation of the Lanham Act. Section 1125(d) of the Lanham Act, known as the AntiCybersquatting Consumer Protection Act (“ACPA”), applies to trademark infringement in website
domain names. See generally Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d).
The ACPA, however, does not apply to the use of metatags; it explicitly dictates liability only for a
person who “registers, traffics in, or uses a domain name that” creates confusion with respect to the
use of a mark. 15 U.S.C.S. § 1125(d)(1)(A)(ii) (LexisNexis 2015); see also Bihari v. Gross, 119 F.
Supp. 2d 309, 316 (S.D.N.Y. 2000) (“Neither Bihari’s attorney, nor this Court, has been able to
find a single case applying the ACPA to metatags. Although no court has expressly stated that the
ACPA does not apply to metatags, the plain meaning of the statute and its legislative history make
this conclusion apparent.”). Nespresso does not allege or demonstrate that Libretto used its mark
in Libretto’s actual domain name and thus, Nespresso, has not established a violation of this
particular provision of the Lanham Act. The Court therefore denies Nespresso’s motion for default
judgment with respect to its Second Cause of Action.
Nespresso has, however, successfully demonstrated Libretto’s liability with respect

1998) (noting that “the analysis under the New York General Business Law is the
same as under the Lanham Act.”); Tri-Star Pictures, Inc. v. Unger, 14 F. Supp.
339, 363 (S.D.N.Y. 1998) (noting that “it is well recognized the standard for
Section 43(a) claims of the Lanham Act and unfair competition claims under New
York law are almost indistinguishable.”); Excelled Sheepskin & Leather Coat
Corp. v. Oregon Brewing Co., No. 12CV1416-GBD, 2014 WL 3874193, at *13
n.9 (S.D.N.Y. Aug. 5, 2014) (“The same standard that applies to the parties’
Lanham Act claims also applies to their unfair competition and common law
trademark claims.”) Because Nespresso has demonstrated Libretto’s liability on
its Lanham Act claims, the Court grants Nespresso’s motion for default judgment
with respect to its New York state and common law claims as well.
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to its Third Cause of Action, False Designation of Origin pursuant to 15 U.S.C. § 1125(a). “A false
designation of origin or false description claim under the Lanham Act is similar to a trademark
infringement claim except that it applies to unregistered as well as registered trademarks. To
prevail on such a claim, a plaintiff must prove that ‘first, . . . its mark merits protection, and
second, that the defendant’s use of a similar mark is likely to cause consumer confusion,’ as to
origin, sponsorship, or affiliation of the defendant’s goods.” Lyons Partnership, L.P. v. D&L
Amusement & Entertainment, Inc., 702 F. Supp. 2d 104, 113 (E.D.N.Y. 2010) (citing Muniz v.
Morillo, No. 06CV6570-RJS, 2008 WL 4219073, at *5 (S.D.N.Y. Sept. 10, 2008)). The Court has
already concluded that Libretto’s use of the Nespresso mark is likely to cause confusion or mistake,
or to deceive consumers as to the source or origin of Libretto’s goods. See discussion supra. Thus,
the Court finds that Nespresso has established Libretto’s liability with respect to its false
designation of origin claim brought pursuant to 15 U.S.C. 1125(a), and therefore grants
Nespresso’s motion for default judgment with respect to its Third Cause of Action. 6

6

Furthermore, in its briefing Nespresso cites the theory of “initial interest
confusion,” as articulated by the Ninth Circuit, in support of its claim that
Libretto’s use of the Nespresso mark in its metatags is likely to create confusion.
See Brookfield Commc’ns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036 (9th
Cir. 1999). In Brookfield, the Ninth Circuit held that the use of metatags in
source code could constitute a violation of the Lanham Act where such use might
lead consumers from the trademark holder’s website to the website of a
competitor. See generally id. This initial confusion, in turn, might cause the
consumer to remain on the competitor’s website and utilize the competitor’s
goods or services instead of returning to the initially-sought mark holder’s
website. The Second Circuit has acknowledged and adopted the initial interest
confusion doctrine, requiring a demonstration of a defendant’s intent to confuse
to prove liability. Savin Corp. 391 F.3d at 462 n.13 (noting that consumers
diverted on the internet can more easily go back, which minimizes harm). Based
on the entirety of the circumstances before it, which include both Libretto’s
prominent use of the Nespresso mark on its packaging and website, as well as in
its metatags, the Court can infer that Libretto intended to create consumer
confusion with respect to Nespresso’s sponsorship or endorsement of its goods.
Nespresso has therefore also demonstrated false designation of origin on a theory

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Nespresso’s Fourth Cause of Action: Trade Dress Infringement
Nespresso’s Fourth Cause of Action against Libretto asserts a claim of trade dress
infringement under the Lanham Act § 1125(a), alleging that Libretto’s espresso capsules are nearly
identical to Nespresso’s. Nespresso alleges that Libretto’s capsule shapes and colors infringe on
Nespresso’s trade dress, which consists of the cone-shaped capsule design, as well as the color
scheme of its capsules. (Compl. ¶¶ 58-60.) In order to succeed on a claim of trade dress
infringement, “a plaintiff must prove (1) that the mark or dress is distinctive as to the source of the
good or service at issue, and (2) that there is the likelihood of confusion between the plaintiff’s
good or service and that of the defendant.” ITC, Ltd. v. Punchgini, Inc., 482 F.3d 135, 154 (2d Cir.
2007) (citations omitted).
In order to demonstrate that it is entitled to protection, Nespresso must prove that
its trade dress is “either inherently distinctive or . . . has acquired distinctiveness through secondary
meaning,” and that the trade dress is nonfunctional. Two Pesos, Inc. v. Taco Cabana, Inc., 505
U.S. 763, 769 (1992). As an initial matter, Nespresso has made uncontroverted allegations with
respect to Nespresso’s heavily publicized use of its mark, as well as the consuming public’s
identification of its product’s distinctive shape, design and color scheme. (Compl. ¶¶ 7, 8, 19, 54,
55.) Moreover, Nespresso has alleged that “[t]he Nespresso Trade Dress, as embodied in
Nespresso’s cone-shaped capsules, is inherently distinctive and/or has acquired secondary
meaning, and is not functional.” (Id. ¶ 54.) Libretto has not appeared in this action, and has
offered no evidence or argument controverting Nespresso’s allegations of the distinctiveness and
non-functionality of its trade dress. The Court therefore finds that Libretto is liable for trade dress

of initial interest confusion liability based on Libretto’s use of the Nespresso
mark in its website metatags.
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infringement under the Lanham Act, and grants Nespresso’s motion for default judgment with
respect to its Fourth Cause of Action.

CONCLUSION
For the foregoing reasons, Nespresso’s motion for default judgment is granted in
part and denied in part. The Court denies Nespresso’s motion with respect to its Second Cause of
Action for false designation or origin pursuant to 15 U.S.C. § 1125(d). The motion is granted in all
other respects, and the Court grants Nespresso the relief it seeks in the form of an Order:
(1) permanently enjoining Defendant Libretto, its agents, servants, employees,
officers and all persons in active concern and participation with them: (a) from using the Nespresso
Marks (as defined in the Complaint) or any marks similar thereto in connection with the
manufacture, distribution, advertising for sale, promotion or sale of any unauthorized goods or
services, including the manufacture, distribution, advertisement, promotion, holding for sale or
selling of the Libretto Capsules (as defined in the Complaint) and in the meta tags of any websites
dedicated to the same (including <librettoespresso.com>); (b) from using the Nespresso Trade
Dress (as defined in the Complaint) or any trade dress similar thereto in connection with the
manufacture, distribution, advertising for sale, promotion or sale of any unauthorized goods or
services, including the manufacture, distribution, advertisement, promotion, holding for sale or
selling of the Libretto Capsules; (c) from using any logo, trade name, trademark or trade dress
which may be calculated to falsely represent or which has the effect of falsely representing that the
services or products of Libretto are sponsored by, authorized by or in any way associated with the
Plaintiff Nespresso or the Nespresso® brand; (d) from infringing Plaintiff Nespresso’s exclusively
licensed trademarks and trade dress; and (e) from falsely representing themselves as being
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connected with, sponsored by or associated with Plaintiff Nespresso or the Nespresso® brand;
(2) ordering the destruction of all unauthorized goods, bearing any copy or colorable
imitation of the Nespresso Marks or the Nespresso Trade Dress, including the Libretto Capsules;
(3) finding that, by the acts complained of by Nespresso as set forth in the
Complaint, Defendant Libretto has infringed Nespresso’s exclusively licensed federally registered
trademarks in violation of 15 U.S.C. § 1114;
(4) finding that, by the acts complained of by Nespresso as set forth in the
Complaint, Defendant Libretto has created a false designation of origin and false representation of
association and has infringed the Nespresso Marks and the Nespresso Trade Dress in violation of
15 U.S.C. § 1125(a); and
(5) finding that, the acts complained of by Nespresso as set forth in the complaint,
constitute willful infringement of the Nespresso Marks and the Nespresso Trade Dress.
The Court will sign and enter the Proposed Default Judgment (see Docket Entry No.
22-4) concurrently with the filing of this Memorandum Opinion and Order.
This Memorandum Opinion and Order resolves Docket Entry Number 21. The
Clerk of Court is respectfully requested to enter judgment in Plaintiff’s favor and close this case.
SO ORDERED.
Dated: New York, New York
June 2, 2016
/s/ Laura Taylor Swain
LAURA TAYLOR SWAIN
United States District Judge

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