MZ Wallace Inc. v. Susan Fuller et al
Filing
99
OPINION AND ORDER.....For the reasons stated in this Opinion, the Clerk of Court shall enter judgment in favor of Oliver Thomas. Oliver Thomass claim for an award of attorneys fees is denied. (Signed by Judge Denise L. Cote on 12/20/2018) (gr) Transmission to Orders and Judgments Clerk for processing.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
MZ WALLACE INC.,
:
Plaintiff,
:
-v:
:
SUE FULLER D/B/A THE OLIVER THOMAS, and:
BLACK DIAMOND GROUP, INC.,
:
:
Defendants.
:
:
-------------------------------------- :
:
BLACK DIAMOND GROUP, INC.,
:
:
Counterclaim :
Plaintiff,
:
-v:
:
MZ WALLACE INC.,
:
:
Counterclaim :
Defendant.
:
:
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Appearances:
18cv2265(DLC)
OPINION AND ORDER
For the Plaintiff/Counterclaim Defendant MZ Wallace:
Adam B. Michaels
Marc Reiner
Hand Baldachin & Amburgey LLP
8 West 40th St., 12th Floor
New York, NY 10018
For the Defendants/Counterclaim Plaintiff Black Diamond Group
Inc. and Defendant Sue Fuller:
David Bernstein
Christopher S. Ford
Kathryn Saba
Olena Vera Ripnick-O'Farrell
Debevoise & Plimpton, LLP (NYC)
919 Third Avenue, 3rd Floor
New York, NY 10022
DENISE COTE, District Judge:
Plaintiff MZ Wallace Inc. (“MZ Wallace”) alleges that
defendants Sue Fuller and Black Diamond Group, Inc. (referred to
as “Oliver Thomas”) infringed its trade dress rights in a
particular quilting style used on nylon handbags and other nylon
accessories it sells.
counterclaims.
Oliver Thomas responded with
Following trial, this Court concludes that MZ
Wallace has no protectable trade dress rights.
Procedural History
This action was filed on March 14, 2018.
MZ Wallace
asserts six causes of action, each of which is premised on its
assertion of trade dress rights: false designation of origin and
dilution in violation of the Lanham Act, deceptive practices and
dilution under New York state law, common law trademark and
trade dress infringement, and common law unfair competition.
Oliver Thomas asserted three counterclaims for a declaration
that MZ Wallace’s alleged trade dress is not protectable, for a
declaration of non-infringement, and for tortious interference
with a business relationship.
On August 22, this Court granted
Oliver Thomas’s motion to dismiss MZ Wallace’s Lanham Act
dilution claim and the New York deceptive practices and dilution
2
claims.
Oliver Thomas’s counterclaim for tortious interference
with business relations was also dismissed.
The Parties
Following the conclusion of discovery, and in anticipation
of a bench trial, the parties filed on November 16 a pretrial
order, proposed findings of fact and conclusions of law, and
defendant’s pretrial memorandum.
With the parties' consent, the
trial was conducted in accordance with the Court's customary
practices for non-jury proceedings, which includes taking direct
testimony from witnesses under a party's control through
affidavits submitted with the pretrial order.
The parties also
served copies of all exhibits and deposition testimony that they
intended to offer as evidence in chief at trial with the
pretrial order.
MZ Wallace presented affidavits constituting the direct
testimony of Lucy Wallace Eustice (“Eustice”), the co-founder
and co-owner of MZ Wallace; Kevin Mogyoros (“Mogyoros”), the
Chief Financial Officer of MZ Wallace; and Sarah Broach
(“Broach”), the Director of Communications of MZ Wallace.
Oliver Thomas submitted affidavits from Sue Fuller (“Fuller”),
the president of Oliver Thomas, and its two expert witnesses:
Hal Poret and Sarah Butler.
Oliver Thomas also presented four
affidavits authenticating physical products and publicly
available internet materials, and sixteen affidavits from
3
various companies certifying documentary evidence of those
companies’ handbag sales.
The parties also offered excerpts from the depositions of
Alan Lunder (“Lunder”), the CEO of defendant Black Diamond;
Carrie Hall (“Hall”), a sales representative for Black Diamond;
Abbie Durkin (“Durkin”), an employee of Palmer& Purchase, a
store that sells MZ Wallace Handbags; Kate Falchi (“Falchi”) 1, a
former Black Diamond employee; Broach; Peter Berta, an employee
of UBM Inc; Poret; Butler; and MZ Wallace 30(b)(6) witnesses
Eustice, Mogyoros, and Monica Zwirner (“Zwirner”), the cofounder of MZ Wallace.
At the final pretrial conference, the parties agreed that
excerpts of deposition testimony of witnesses who testified live
at trial that had been submitted with the pretrial order would
not be offered. 2
At trial, both parties called Eustice,
Mogyoros, and Fuller, who were cross-examined.
Oliver Thomas
called Zwirner. 3
The plaintiff elected not to call Falchi to testify live at
trial.
1
This agreement eliminated the deposition testimony of Fuller
and the non-30(b)(6) testimony of Eustice, Zwirner, and
Mogyoros.
2
MZ Wallace chose not to cross-examine the defendants’ experts.
The parties agreed that their affidavits and designated
deposition excerpts would be received at trial.
3
4
This Opinion presents the Court's findings of fact and
conclusions of law.
The findings of fact appear principally in
the following Background section, but also appear later in the
Opinion.
Background
This case arises out of MZ Wallace’s claim for trade dress
rights in a design consisting of (1) a nylon bag; (2) with a
quilted grid; (3) of 7/8 inch squares; (4) placed at a 45-degree
angle with a corner facing downward; and (5) with squares
covering all or substantially all of the bag (the “Trade
Dress”).
Founding of MZ Wallace
MZ Wallace is a fashion company that manufactures and
sells handbags and other fashion accessories.
The company was
founded in 1999 by Monica Zwirner and Lucy Wallace Eustice.
Since its founding, MZ Wallace has cultivated a brand of durable
and functional handbags that convey a sense of luxury but are
not exceedingly expensive.
The critical feature of their design
concept is the combination of a nylon bag and expensive Italian
leather trim.
In May 2000, MZ Wallace opened its first store on Crosby
Street in New York City and launched its first collection of
bags. The cornerstone of this first collection was a
5
rectangular-shaped tote bag made of Cordura Nylon called the “NY
Tote.”
MZ Wallace’s second collection, launched in late 2000,
included a quilted version of the NY Tote.
This bag was made of
nylon fabric with a pattern of quilted squares placed at a 45degree angle covering all or substantially all of the bag.
MZ
Wallace was not the first company to have created and sold a
quilted handbag.
By 2005, MZ Wallace sold six more styles of
bags that bore the Trade Dress, and by 2007 it had added three
more to the collection.
MZ Wallace acknowledges that its use of particular grades
of nylon in its handbags has functional benefits, including
being lightweight, strong, and resistant to liquids.
MZ Wallace
often uses the term “functional” in internal documents and in
marketing materials in describing its bags that bear the Trade
Dress.
Quilting Process
Quilting involves stitching two pieces of fabric together
with an insulating “batting” in the middle.
The quilting stitch
holds the insulation in place and the more space between
quilting stitches the greater the chance of the insulation
migrating or clumping.
“Channel quilting,” which involves
single straight lines of stitching down the fabric, is less
labor intensive and therefore cheaper to produce.
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Square
quilting requires more stitching, which is more time intensive
and costly.
If the squares are aligned horizontally across the
fabric, it requires more fabric and therefore is more expensive
to create products or garments where the quilting does not seem
misaligned at the seams.
Using small square quilting with
squares placed at a 45-degree angle avoids the problems of
perceived misalignment at the seams.
Square quilting can also
be produced on low-cost and easily available flatbed equipment.
The quilting used on MZ Wallace bags bearing the Trade
Dress is made of squares with edges that measure 2.5 centimeters
on a flat piece of nylon.
This is 0.98”, and not the 7/8”
claimed for the Trade Dress.
MZ Wallace asserts that its
reference to 7/8” squares for its Trade Dress refers to the
dimensions of the squares after quilting.
Growth of MZ Wallace
MZ Wallace launched an e-commerce website and began selling
bags through this website in 2004.
In 2010, MZ Wallace launched
a second store, also in New York City.
Also in 2010, MZ Wallace
launched a new collection of bags made of Oxford Nylon, which
included the Metro Tote, the brand’s most famous handbag.
The
Metro Tote is a soft unstructured nylon tote bag that bears the
Trade Dress.
The Metro Tote also includes three-channel nylon
quilted handles that are attached to the bag with a square panel
with a stitched cross through the center; a metal logo plate
7
with the words “MZ WALLACE” on one side of the bag; leather
strips on the handles, and leather detailing, including leather
feet with red trim and a diamond leather logo with the words “MZ
WALLACE” on the bottom of the bag.
By 2014, the Metro Tote was a commercial success.
As of
April 2015, the company recognized, however, that there was
“limited brand awareness” of its products.
It identified as one
of its goals, the desire to strengthen and articulate the brand.
8
From 2012 through 2017, MZ Wallace continued to launch
other new products that also bore the Trade Dress.
In 2017, it
added the Crosby line, which used the Trade Dress with a more
formal product line.
MZ Wallace also sells many products that
do not use the Trade Dress.
In fact, MZ Wallace admits that
about half of its stock keeping units in its collection do not
bear the Trade Dress. 4
MZ Wallace has identified a collection of
bags with pleated pockets as another “signature look” of the
brand.
MZ Wallace’s bags that bear its Trade Dress have had
significant commercial success.
Between 2014 and 2018, MZ
Wallace sold hundreds of thousands of items bearing the Trade
Dress, resulting in tens of millions of dollars in sales.
MZ
Wallace bags are sold through its website; its two retail stores
in New York City; the department stores Bloomingdales, Saks
Fifth Avenue, Nordstrom, and Von Maur; a website called NET-APORTER; and almost three hundred boutiques across the country.
Although MZ Wallace goods are sold across the country, the bulk
of its sales are in New York, New Jersey, and Connecticut.
The
Metro Tote retails for between $125 and $235, depending on the
size and color.
The medium Metro Tote, which is around the same
A stock keeping unit is a unique number assigned to each item
stocked (i.e. a product with a particular size, color, design,
etc.) for purposes of inventory and tracking.
4
9
size as the Oliver Thomas tote identified by MZ Wallace in the
Complaint, usually sells for $215.
Since 2013, MZ Wallace has engaged in systematic
advertising, primarily through digital media.
MZ Wallace
admitted at trial that all of its advertising features the
company name.
Some of the advertising has included images of
bags bearing the Trade Dress, but MZ Wallace admitted at trial
that it has never run “look-for” advertising featuring the Trade
Dress.
MZ Wallace has created at least one “look-for”
advertisement featuring the leather diamond logo on the bottom
of its bags.
In 2015, MZ Wallace began to run digital
advertising featuring just the words “MZ Wallace” or “MZ Wallace
Shop Now” superimposed over a cropped image of fabric bearing
the quilted pattern used by MZ Wallace in its Trade Dress.
Secondary Meaning Survey
The defense expert Poret designed a survey to test whether
the MZ Wallace Trade Dress has acquired secondary meaning.
Poret surveyed women over 18 years of age living in the United
States who indicated through a series of threshold questions
that they had or were likely to purchase a quilted tote or
quilted shoulder bag and spend at least $200 to do so.
His
survey, which was conducted online, used two photographs of the
MZ Wallace Metro Tote in basket weave, which was identified in
10
the Complaint as an “excellent example” of the Trade Dress.
Poret removed the MZ Wallace name from the photographs.
Of the 200 women surveyed, only 11% -- 22 respondents -associated the “look of the bag” shown with only one particular
company or brand.
Half of those respondents -- 11 respondents -
- identified that company as Vera Bradley.
Only 2 of those 22
respondents -- 1% –- named MZ Wallace as the company.
Of the
seven who were unable to name the company or brand, only four
indicated that they had seen such a bag before.
Based on this
survey, Poret concluded that the highest possible measure of
secondary meaning for the Trade Dress is 3%.
MZ Wallace Trade Mark Applications
MZ Wallace has three registered trademarks for its brand
name: two, registered in 2002 and 2003, for the name “MZ WALLACE
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NEW YORK, NY,” and one, registered in 2015, for the name “MZ
WALLACE NEW YORK.”
It has no trademark registration for its
Trade Dress.
In July 2014, MZ Wallace filed trademark registrations for
the name “THE METRO TOTE” and for the Metro Tote’s trade dress.
Registration in the name was granted on July 28, 2015.
On
September 19, 2014, the Patent and Trademark Office (“PTO”)
issued a non-final Office Action refusing MZ Wallace’s
registration for the trade dress.
In its initial application, MZ Wallace described the Metro
Tote trade dress as “the configuration of a handbag having a
diamond quilted pattern, with an inverted trapezoidal shape when
viewed from the side, parabolic handles, and a diamond-shaped
logo in the middle of the bottom panel.”
There is no reference
to the size of the quilting on the fabric claimed in the trade
dress or to the use of nylon.
The PTO denied the application
primarily on the grounds that the applied-for mark “consists of
a nondistinctive product design or nondistinctive features of a
product design that is not registrable on the Principal Register
without sufficient proof of acquired distinctiveness.”
On March 19, 2015, MZ Wallace responded to the Office
Action by submitting a new drawing and a revised description of
the Metro Tote trade dress.
This letter described the trade
dress as “a three-dimensional configuration comprising a handbag
12
having a diamond quilted pattern and a diamond-shaped logo in
the middle of the bottom panel.”
Again, the application did not
refer to two of the elements of the Trade Dress: the size of the
quilted diamond pattern and the use of nylon.
The MZ Wallace
response also attached examples of MZ Wallace advertising and
promotional materials as well as media coverage intended to show
acquired distinctiveness.
On April 7, 2015, the PTO issued another non-final Office
Action stating that the Metro Tote trade dress was not
distinctive and that the evidence submitted was insufficient to
show acquired distinctiveness.
It observed that there was a
lack of evidence demonstrating “that consumers recognize the
claimed features of the goods”, including the diamond quilted
pattern, and associate MZ Wallace as the source of those
features.
It observed that most of the company’s advertising
references “functional aspects of the bags” and not “the diamond
quilted pattern.”
The PTO added that the MZ Wallace evidence
did “not contain any ‘look for’ advertising that promotes” the
diamond quilted pattern claimed by the company.
The PTO attached evidence of extensive third party use of a
diamond quilted pattern on handbags.
If the applicant renewed
its application, the PTO warned that it “must disclaim” the
diamond quilted pattern because it is “nondistinctive matter
that does not function as a trademark to indicate the source of
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applicant’s goods and to identify and distinguish them from
others.”
At trial, MZ Wallace has explained that it does not
seek exclusive rights to use a diamond quilted pattern on
handbags.
MZ Wallace Polices the Marketplace
Quilted bags made of synthetic material are sold by many
brands.
MZ Wallace admits that other manufacturers in the
handbag business make quilted nylon bags and that synthetic bags
bearing diamond quilting presented at a 45-degree angle is
common.
The brands include Calvin Klein, Kate Spade,
LeSportsac, Steve Madden, Marc Jacobs, Vera Bradley, Target,
Pursetti, Tommy Hilfiger, Kate + Alex Cuffaro, Guess?,
Wallflower, and Chanel.
Each of the brands listed above sell or
have sold bags made of quilted synthetic fabric with squares
presented at a 45-degree angle covering most of the bags.
At
least eleven of these brands sell bags made of quilted nylon
specifically.
Images of two of the third-party nylon bags with
diamond quilting are reproduced below.
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Target:
Wallflower:
Since 2012, MZ Wallace has sent twelve companies cease and
desist letters claiming that those companies’ products –- for
the most part tote bags -- infringed MZ Wallace’s intellectual
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property rights.
Seven of those companies subsequently
discontinued or ceased selling the bags identified in the
letter.
The cease and desist letters in the trial record that
contain trade dress descriptions use eight different
descriptions of the claimed trade dress.
None of them used the
description of the Trade Dress asserted in this action.
Four
examples suffice.
In 2012, MZ Wallace sent its letter to a company called Big
Buddha and described the infringed upon trade dress as “a dualhandled tote constructed of a soft, lightweight, nylon and
featuring a quilted design . . . monochromatic . . .[with] a
gentle sheen . . . [and] zipper closure.”
An October 21, 2014
cease and desist letter sent to the company Joe Fresh described
the allegedly infringed upon trade dress as including “a diamond
quilted pattern[;] an inverted trapezoidal shape when the bag is
viewed from the side[;] long, parabolic handles[; and] squares
with ‘X’ stitching where the handles are attached to the
handbag.”
A December 14, 2016 letter to a company called
Brighton described the trade dress as including the following
“distinctive aspects”:
incredibly lightweight, durable, and soft signature
quilted nylon body; a unique construction making it
foldable, rollable, packable and crushable while
keeping its unique shape; placement of [the] logo;
leather feet to protect the bottom of the bag;
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additional storage pouch; configuration of the
pockets; leather trim detail; comfortable padded and
reinforced handles with a longer handle drop to fit
perfectly over the shoulder (including attached padded
channels with a distinctive ‘X’).
The Brighton bags that MZ Wallace claimed in the letter use
the MZ Wallace trade dress feature heart-shaped quilting.
The last cease and desist letter that MZ Wallace sent prior
to its letter directed at Oliver Thomas was sent on
February 28, 2017 to a company named Gold No. 8.
The Gold
No. 8 bag introduced at trial bears quilting of 1.5-inch
squares.
In this letter, MZ Wallace described a trade
dress in its bags as well as in a braided tassel accessory.
The trade dress in its bags is described as “a quilted
pattern comprised of square diamonds” and the trade dress
in the tassel is described as “a plurality of leather
strips joined together at one end, with a loop of leather
connecting the leather strips to a metal ring and clasp,
with all of these elements in the same metallic color.”
MZ Wallace has not sent cease and desist letters to
all third-party companies that sell bags bearing the Trade
Dress.
Chanel’s Coco Cocoon bag is one such bag.
At trial
MZ Wallace admitted that the Chanel Coco Cocoon bag bears
all five elements of the Trade Dress.
In fact, a September
2018 article in purseblog describes the MZ Wallace Sutton
bag as “a less-expensive alternative to Chanel’s puffy,
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quilted Coco Cocoon bag.”
The Coco Cocoon bag was launched
in 2009 -- one year before MZ Wallace’s signature Metro
Tote.
The article suggests that MZ Wallace’s Sutton bag
“owes a design debt” to Chanel.
At trial, MZ Wallace acknowledged that it did not have
the right to be the only company using square quilted nylon
placed at a 45-degree angle covering all of the bag.
Rather, it asserted that the size of its square quilting,
in combination with these other elements, rendered the
Trade Dress protectable.
MZ Wallace’s Definition of its Brand in 2018
In January 2018, the Brand Intersection Group prepared a
“Visioning Discussion” for MZ Wallace.
While, the document,
which appears to reflect and build upon interviews with the
brand’s creators, does mention quilting as an ingredient of the
brand, it describes it as a secondary feature.
The use of nylon
and leather accents are identified as “primary” features.
The
document does not identify the Trade Dress as a component of the
brand.
The document describes the company’s original goal as
“becoming the leading U.S. premium nylon bag company.”
In
another passage it describes its “distinctive design” as “Nylon,
Quilting, Pockets, Pleats, Leather detailing.”
The
“recognizably MZW” features that are listed are “the quilting
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and pleating of the nylon, natural leather details and red edge
dye throughout the bag.”
In an August 2018 letter sent from MZ Wallace to retail
partners, MZ Wallace announced its lawsuit against Oliver Thomas
and made clear that it would not continue to sell its products
to any organization that also worked with that brand.
MZ
Wallace described the elements of its products that “set MZ
Wallace apart” as including “high-quality materials, including
sustainably-produced Italian leather and specialty nylons that
have been carefully crafted to have a luxurious look and feel”;
signature hardware and red edge-dyed leather”; interior pockets;
detachable pouches; and double-stitched quilting.”
This letter
did not identify the Trade Dress or refer to the use of 7/8-inch
square quilting, the 45-degree angle of the squares, or quilting
covering all or substantially all of the bag.
Oliver Thomas
Oliver Thomas is a fashion brand division of Black Diamond.
The brand was founded in 2017 by Fuller.
For over twenty years
prior to founding Oliver Thomas, Fuller worked in the fashion
industry at a variety of companies, including Ralph Lauren,
Lands’ End, L.L. Bean, Kohl’s, Carhartt, and Vera Bradley.
During this time she worked extensively with quilting
fabrication and overseas manufacturers of quilted fabrics,
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including in India and China.
While at Carhartt, Fuller began
working with Lunder, the CEO of Black Diamond.
In early 2017, Fuller began working with Lunder and Black
Diamond employee Falchi to develop a new line of bags for Black
Diamond.
At some point, Fuller decided to move away from the
original bag design that she had been working on with Falchi,
which used industrial-style canvas.
In July 2017, Fuller
officially named the brand that she was developing Oliver
Thomas.
Around this time, Black Diamond obtained trademark
rights in the Oliver Thomas wordmark.
In developing the Oliver Thomas line of bags, Fuller
studied other brands’ products.
Obtaining samples of
competitors’ products and deconstructing them is a common
practice in the fashion industry.
Fuller had instructed fashion
designer Falchi to purchase MZ Wallace and Vera Bradley samples.
Falchi purchased three MZ Wallace bags in May 2017.
Fuller told
Falchi to give the MZ Wallace and Vera Bradley bags to a
technical designer, who then created four technical designs,
dated May 30, 2017 and June 5, 2017.
These technical designs,
along with MZ Wallace promotional materials, were sent to the
factory that Fuller was using in China to create sample
products.
In late July, Fuller and the manufacturing team in
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China analyzed bags from a number of brands, including
principally MZ Wallace. 5
Fuller decided to use one-inch by one-inch quilted squares
oriented at a 45-degree angle.
Fuller also decided to make the
Oliver Thomas products out of polyester.
According to Falchi, Fuller intended not merely to draw
inspiration from MZ Wallace, but specifically to “take MZ
Wallace and make it cheaper and bring it to the Midwest.”
Falchi says that Fuller expressed this intention to her in a
meeting in May 2017.
Falchi recalls conveying to Fuller that
the Oliver Thomas design lacked uniqueness and that the market
was already saturated by lightweight quilted bags.
In August 2017, Fuller officially joined Black Diamond to
run Oliver Thomas.
The design period for the Oliver Thomas bags
lasted only a few months with expenditures for product
development, including the cost of materials acquisition and
prototype costs, being relatively modest.
Oliver Thomas
At trial, MZ Wallace belatedly sought to introduce thirty
exhibits containing internal Black Diamond emails attached to
30(b)(6) deposition testimony of Fuller. The majority of these
were exchanges between Sue Fuller, the Oliver Thomas
manufacturers in China, and other members of the Oliver Thomas
design team dating from June to November 2017. Many of the
emails referenced MZ Wallace products, including explicitly
modeling aspects of Oliver Thomas designs off of elements of MZ
Wallace products. These exhibits were not received into
evidence at trial. Admission of these documents would not have
altered the outcome of this trial.
5
21
launched its website and began selling its first line of
handbags on November 2, 2017.
The Oliver Thomas Tote
The Oliver Thomas bags, like the MZ Wallace bags, have a
quilted synthetic exterior.
The Oliver Thomas Wingwoman Totes,
which MZ Wallace has accused of copying its Metro Tote, have
several features not found in MZ Wallace products.
These
include a patent-pending “Secret Stash” bottom, which allows
consumers to store items in a separate compartment in the bag;
RFID blocking technology, which protects sensitive information
stored on credit cards and passports; a non-quilted strip of
material running from the top to bottom of the bag on one side;
a “stay-put” strap that connects the two handles; and a gold
crown logo.
The Oliver Thomas name is displayed in small type
at the bottom of the gold crown logo.
Oliver Thomas bags do not
bear leather trim and are promoted as vegan and machinewashable.
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Oliver Thomas also sells decorative patches that may be
used to customize its bags.
company name and logo.
The Oliver Thomas hangtags bear the
These tags also promote the unique
features of the Oliver Thomas bags.
Oliver Thomas sells its products primarily through its
website as well as wholesale to over one hundred boutiques
across the country.
MZ Wallace does not permit its retailers to
sell Oliver Thomas products and is not aware of any authorized
sellers of MZ Wallace bags that also sell Oliver Thomas bags.
23
In a December 2017 email, Sue Fuller identifies Oliver Thomas’s
competitive set, or its principal competitors, as the following
companies: Hammit, Hobo, Coach, Dooney and Bourke, Spartina,
Scout, Vera Bradley, and MZ Wallace.
The Oliver Thomas
Wingwoman Tote retails for between $99 and $109, depending on
the color.
Since launching, the brand has garnered media attention in
several mainstream outlets, including Travel + Leisure, US
Weekly, Time, and Forbes.
Some of these articles have mentioned
qualities of the Oliver Thomas bags, including that it is
machine washable, has a bottom zip compartment, and includes
RFID-blocking technology.
There is no evidence that the press
has compared the Oliver Thomas products to MZ Wallace products.
Oliver Thomas is not yet a profitable business.
Cease and Desist Letter
In February 2018, at a trade show, Eustice approached the
Oliver Thomas booth and told the employees working in the booth
that Oliver Thomas produced MZ Wallace knock-offs.
On February
26, 2018, Oliver Thomas received a cease and desist letter from
MZ Wallace.
In the letter, MZ Wallace identifies three Oliver
Thomas products that it claims infringe on MZ Wallace’s
trademark rights.
The letter accuses Oliver Thomas’s Wingwoman
Tote as mimicking “the Metro Tote’s shape, straps, and
pocketing” and describes the bags’ similarities as including:
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“quilted nylon material,[] two three-channeled straps (each
attached to the body of the handbag with a distinctive ‘X’
pattern attachment), distinctive pocket configurations, and
interior clips.”
The letter did not include a description of
the Trade Dress asserted here.
There was no reference to the
dimension or orientation of quilted squares.
On March 7, 2018, Oliver Thomas responded, through counsel,
that it did not believe MZ Wallace had trade dress protection in
the designs it highlighted in its letter.
In the Complaint,
filed on March 14, 2018, MZ Wallace for the first time offers
the description of the Trade Dress asserted at trial.
MZ
Wallace erroneously claims in the Complaint that Oliver Thomas’s
bags are made of nylon.
Consumer Reactions to the Brands
MZ Wallace has offered no admissible evidence of consumer
confusion. 6
It admits that it has never heard of any instance of
confusion where a consumer purchased an Oliver Thomas bag under
the mistaken belief that it was an MZ Wallace bag.
MZ Wallace
has testified that it does not have evidence that the MZ Wallace
brand has been harmed because of consumer confusion.
6
Among other evidence, MZ Wallace has attempted to rely on
negative comments about Oliver Thomas that its employees or
their friends posted on the Oliver Thomas Instagram page. These
posts do not show confusion and reflect poorly on those who
posted the comments or encouraged the writers.
25
Likelihood of Confusion Survey
Defendant expert Butler designed an Ever-Ready survey to
evaluate whether Oliver Thomas products are likely to cause
consumer confusion.
See Union Carbide Corp. v. Ever-Ready,
Inc., 531 F.2d 366, 385-88 (7th Cir. 1976).
The online survey
showed consumers the defendant’s products and asked respondents
questions to elicit whether respondents believe the defendant’s
products come from, are affiliated with, or are sponsored by a
particular company.
This survey was directed at women over the
age of 18 living in the United States who indicated through
responses to a series of screening questions about purchasing
habits that they had purchased or were likely to purchase a tote
bag, cross-body bag, or a fashion tote bag at a boutique or
local store or a store for a specific handbag brand at various
price points. 7
The price cut-offs were intended to eliminate
women who would not spend at least the price of an Oliver Thomas
product. 8
The survey showed 200 screened participants images of
the Oliver Thomas Wingwoman Tote in the basket weave pattern
that the Complaint in this action describes as bearing a
The survey questions excluded inter alia women who worked in
the advertising or fashion accessory businesses.
7
The price cut-offs were at least $99 for a tote bag, at least
$49 for a cross-body bag, and at least $89 for a fashion
backpack.
8
26
“striking resemblance” to the Metro Tote, which is an “excellent
example” of the Trade Dress.
This bag was also highlighted by MZ Wallace in its February 26,
2018 cease and desist letter.
None of the two hundred individuals surveyed indicated that
the Oliver Thomas bag came from, was affiliated with, or was
sold with the permission of MZ Wallace.
Instead, the
respondents named thirty-two other brands, such as Vera Bradley,
Coach, and Kate Spade.
When asked to explain what made them
choose the particular brand they had named, several referred to
the quilted pattern of the bag.
Based on this survey, Butler
concluded that consumers were not likely to confuse Oliver
Thomas products with MZ Wallace products in the real world.
27
Discussion
MZ Wallace’s primary claim is for infringement of its trade
dress under Section 43(a) of the Lanham Act.
Under this
section:
Any person who, on or in connection with any goods ...
uses in commerce any word, term, name, symbol, or
device, or any combination thereof, or any false
designation of origin ... which ... 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
... shall be liable in a civil action by any person
who believes that he or she is or is likely to be
damaged by such act.
15 U.S.C. § 1125(a)(1)(A).
Trademark infringement claims under
Section 43(a) of the Lanham Act are analyzed in two stages.
Christian Louboutin S.A. v. Yves Saint Laurent Am. Holdings,
Inc., 696 F.3d 206, 216 (2d Cir. 2012).
“The first prong looks
to whether the senior user's mark is entitled to protection; the
second to whether the junior user's use of its mark is likely to
cause consumers confusion as to the origin or sponsorship of the
junior user's goods.”
Guthrie Healthcare Sys. v. ContextMedia,
Inc., 826 F.3d 27, 37 (2d Cir. 2016).
In establishing that its
mark is entitled to protection, a plaintiff asserting trade
dress rights in the design of a product must show that the trade
dress is non-functional, has secondary meaning, and is not
28
overbroad or generic.
See Yurman Design, Inc. v. PAJ, Inc., 262
F.3d 101, 115–16 (2d Cir. 2001).
In any claim of trade dress infringement, the plaintiff
must offer “a precise expression of the character and scope of
the claimed trade dress.”
Landscape Forms, Inc. v. Columbia
Cascade Co., 113 F.3d 373, 381 (2d Cir. 1997).
A product's
trade dress “encompasses the overall design and appearance that
make the product identifiable to consumers.”
Nora Beverages,
Inc. v. Perrier Grp. of Am., Inc., 269 F.3d 114, 118 (2d Cir.
2001).
A plaintiff must specify its trade dress by
“articulat[ing] the design elements that compose” it.
262 F.3d at 116.
Yurman,
The “focus on the overall look of a product
does not permit a plaintiff to dispense with an articulation of
the specific elements which comprise its distinct dress.”
Landscape, 113 F.3d at 381.
The Second Circuit “exercise[s]
particular caution when extending protection to product designs”
because “trade dress claims raise a potent risk that relief will
impermissibly afford a level of protection that would hamper
efforts to market competitive goods.”
15 (citation omitted).
Yurman, 262 F.3d at 114-
Without a precise expression of the
trade dress, courts are “unable to evaluate how unique and
unexpected the design elements are in the relevant market.”
Landscape, 113 F.3d at 381.
29
Secondary Meaning
In order for a trade dress to be protectable, “the mark
must be distinctive and not generic.”
F.3d at 216 (citation omitted).
Christian Louboutin, 696
A mark is “inherently
distinctive” if “its intrinsic nature serves to identify a
particular source.”
Id. (citation omitted).
A trade dress can
“acquire” distinctiveness by developing “secondary meaning in
the public mind.”
Id. (citation omitted).
“A mark has acquired
secondary meaning when, in the minds of the public, the primary
significance of a product feature is to identify the source of
the product rather than the product itself.”
Id. (citation
omitted).
“The existence of secondary meaning is a question of fact,
with the burden of proof on the party claiming exclusive rights
in the designation.”
Bristol-Myers Squibb Co. v. McNeil-P.P.C.,
Inc., 973 F.2d 1033, 1041 (2d Cir. 1992) (citation omitted).
In
determining whether a mark has acquired secondary meaning, the
focus “is not the population at large, but prospective
purchasers of the product.”
Lane Capital Mgmt., Inc. v. Lane
Capital Mgmt., Inc., 192 F.3d 337, 345 (2d Cir. 1999).
Factors
that are considered in determining whether a mark has developed
secondary meaning include “(1) advertising expenditures, (2)
consumer studies linking the mark to a source, (3) unsolicited
media coverage of the product, (4) sales success, (5) attempts
30
to plagiarize the mark, and, (6) length and exclusivity of the
mark's use.”
Genesee Brewing Co., Inc. v. Stroh Brewing Co.,
124 F.3d 137, 143 n.4 (2d Cir. 1997) (citation omitted).
Although a plaintiff can establish secondary meaning through a
variety of evidence, it is not uncommon for the proponent of
secondary meaning to offer “some form of survey of consumer
attitudes under actual market conditions.”
Mattel, Inc. v.
Azrak–Hamway Intern., Inc., 724 F.2d 357, 361 (2d Cir. 1983).
But “every element need not be proved” for a determination of
secondary meaning to be made.
Thompson Med. Co. v. Pfizer Inc.,
753 F.2d 208, 217 (2d Cir. 1985).
While “imitative intent can
help support a finding of secondary meaning, it does not
necessarily mandate one.”
Bristol–Myers Squibb, 973 F.2d at
1042 (citation omitted).
Use by third parties of a mark cuts
against the overall strength of the mark.
See Streetwise Maps,
Inc. v. VanDam, Inc., 159 F.3d 739, 744 (2d Cir. 1998).
MZ Wallace has not met its burden of proving that its Trade
Dress has acquired secondary meaning.
MZ Wallace has not
established that consumers associate the Trade Dress with a
single source, much less with MZ Wallace.
MZ Wallace has presented evidence of millions of dollars of
advertising expenditures, largely over the internet.
The
figures it has presented, however, represent overall advertising
spending.
While it has advertised the MZ Wallace name with
31
goods bearing the Trade Dress, it has not provided any
indication of what portion of its advertising expenditures was
spent on such advertising as opposed to advertising featuring MZ
Wallace products that do not bear the Trade Dress.
MZ Wallace
has not advertised the Trade Dress through any “look for”
advertisements.
At best, MZ Wallace has presented evidence that
it engaged in “look for” advertising that associated some
elements of its Trade Dress with the MZ Wallace brand.
It has
advertised an image of a swath of quilted fabric and the name
“MZ Wallace.”
This advertising, however, does not identify the
size of the quilted squares or the kind of fabric used in the
quilting.
Taken as a whole, MZ Wallace has not shown, through
this or other advertising evidence offered by the parties, that
its advertising promotes recognition of the Trade Dress rather
than recognition of the MZ Wallace brand name.
MZ Wallace has sold bags bearing the Trade Dress for almost
two decades, and in recent years it has had considerable
success.
Its lines of bags, however, include many without the
Trade Dress.
During this entire period, its use of nylon quilted fabric
to cover all or virtually all of a bag has been far from
exclusive.
That material has been and is used by a significant
number of third party brands.
Many of these third parties sell
tens of thousands of such products each year, and the use of a
32
one-inch diamond pattern in the quilting for these bags is
common.
While MZ Wallace has submitted evidence of some
attempts to enforce its rights against these third parties, a
fact that would support a showing of secondary meaning, the
trade dress described in the cease and desist letters sent to
these brands is inconsistent and often contains significant
variations from that proposed in this case.
The evidence of the
ubiquity of this third-party use in the market significantly
undercuts the plaintiff’s efforts to show that its Trade Dress
has achieved secondary meaning.
To establish secondary meaning, MZ Wallace relies
principally on the assertion that Oliver Thomas intentionally
copied MZ Wallace’s design.
It asserts that this should create
a presumption of secondary meaning.
it copied MZ Wallace’s bags.
Oliver Thomas denies that
To the extent that MZ Wallace
defines copying as the creation of a counterfeit or knock-off
product, it has not proven this point.
To the extent MZ Wallace
accuses Oliver Thomas of copying in the sense that Oliver Thomas
has incorporated elements of MZ Wallace’s product into its bags,
it is correct.
As MZ Wallace admitted at trial, however, it is
entirely lawful to copy a style in which there is no protectable
trade dress.
The evidence presented leaves no doubt that Oliver Thomas
used certain elements of MZ Wallace bags that it believed
33
effectively tapped into consumer desires, and created similar
bags in a lower price range.
MZ Wallace’s bags, however, were
not the only products on which Oliver Thomas modeled its
designs.
Moreover, each of those design elements were common
features of handbag design.
The plaintiff has not shown that
Oliver Thomas sought to copy elements of MZ Wallace bags in
order to benefit from association or confusion with MZ Wallace
or to unfairly tread upon any intellectual property rights of MZ
Wallace.
Several of the features of MZ Wallace bags that MZ
Wallace considers significant to brand identification, including
the use of leather and a bottom diamond logo, do not appear on
the Oliver Thomas products.
Other elements that MZ Wallace has
mentioned in its cease and desist letters -- such as leather
feet on the bottom of the bag -- are similarly absent.
Oliver
Thomas has created a crown logo and adopted a name, neither of
which has any resemblance to the MZ Wallace identifiers.
And,
while some of the bags presented at trial from the two brands
look strikingly similar in shape or share similar prints or
colors, MZ Wallace has not identified the shape, print, or color
of a bag as part of its Trade Dress.
While evidence of
intentional appropriation of a competitor’s trade dress can be
powerful evidence of the existence of secondary meaning in that
trade dress, this is not such a case.
34
While not necessary to establish secondary meaning, it is
noteworthy that MZ Wallace introduced no survey evidence showing
that consumers associate the Trade Dress with MZ Wallace.
contrast, Oliver Thomas has presented the Poret survey.
In
As
described above, this survey showed that at most 3% of the
survey’s respondents associated the image of an MZ Wallace bag
presented to the respondents with an anonymous source or MZ
Wallace.
The lack of survey evidence from MZ Wallace combined
with this very unfavorable survey evidence from Oliver Thomas
cuts strongly against any finding that the Trade Dress has
acquired secondary meaning.
MZ Wallace argues that the Poret survey should not be
accepted as a reliable measure of whether the Trade Dress has
acquired secondary meaning because, it contends, the survey’s
design was so flawed as to eliminate or severely limit the
survey’s probative value.
arguments.
MZ Wallace principally relies on four
It contends that the survey’s use of a screening
question that required respondents to indicate that they had
bought or were likely to buy “quilted” bags in order to continue
with the survey was flawed because it improperly suggested to
respondents that quilting was a broad category akin to a type of
fabric and so could not be considered proprietary.
Second, MZ
Wallace asserts that the survey universe was flawed because it
included respondents who expressed an interest in both tote and
35
shoulder bags, although the stimulus shown was just a tote bag.
Third, MZ Wallace argues that the stimulus shown to respondents
-- a photo of the MZ Wallace Metro Tote in the basket weave
print -- was improper because this particular bag was a seasonal
product that is not adequately representative of the Trade
Dress.
Finally, MZ Wallace asserts that the key question --
which defined “the look” of the stimulus as “the overall
appearance of the product created by the combination of the
various features” -- was confusing because it did not adequately
direct the respondent to focus on the Trade Dress.
None of the aspects of the survey to which MZ Wallace
points are fatal to or diminish in any meaningful way the impact
of its results.
It is noteworthy, for example, that MZ Wallace
itself singled out its basket weave Metro Tote in its Complaint
as an “excellent example” of its Trade Dress.
The survey results are not surprising.
Until this lawsuit,
MZ Wallace had not settled on a definition of its Trade Dress
and has not undertaken the kind of campaign that would cause
consumers to understand that the Trade Dress signifies the
source of a product.
Indeed, this lawsuit is its first serious
effort to define and enforce the Trade Dress.
Although MZ
Wallace witnesses testified that the company settled on a
definition of its Trade Dress in October 2015, after its failure
to achieve registration of its other trade dress descriptions,
36
the evidence is to the contrary.
The Trade Dress, as described
in the 2018 Complaint filed in this action, does not appear in
any of the four cease and desist letters MZ Wallace sent to
companies after October 2015, including most noticeably the
February 26, 2018 letter it sent to Oliver Thomas.
Establishing
secondary meaning in a combination of design features,
particularly where the individual features are ubiquitous in
handbags and have been so for decades, is a daunting task.
MZ
Wallace has failed to carry its burden to shown that its Trade
Dress has achieved secondary meaning.
The Trade Dress,
therefore, is not entitled to protection under the Lanham Act.
Functionality
Oliver Thomas has also raised serious doubts about whether
MZ Wallace’s claimed Trade Dress is functional, another factor
that is fatal to its Trade Dress protection claim.
No mark is
entitled to protection if a company's “competitors must be able
to use [it] in order to effectively communicate information
regarding their products to consumers.”
Star Indus., Inc. v.
Baccardi & Co. Ltd., 412 F.3d 373, 382 (2d Cir. 2005).
Thus,
even if a mark is shown to have acquired secondary meaning,
proof that the mark is functional will preclude protection.
A
product feature is functional “if it is essential to the use or
purpose of the article or if it affects the cost or quality of
the article.”
TrafFix Devices, Inc. v. Mktg. Displays, Inc.,
37
532 U.S. 23, 32 (2001) (citation omitted).
If the product
feature is an aesthetic rather than utilitarian feature, it is
appropriate also to consider whether protecting it from
infringement will place competitors at a “significant nonreputation-related disadvantage.”
Id. at 33 (citation omitted).
“Lanham Act protection does not extend to configurations of
ornamental features which would significantly limit the range of
competitive designs available.”
Christian Louboutin, 696 F.3d
at 221 (2d Cir. 2012) (citation omitted).
The Lanham Act
contains a “statutory presumption that features are deemed
functional until proved otherwise by the party seeking trade
dress protection.”
TrafFix Devices, 532 U.S. at 30.
Because MZ Wallace has not shown that its Trade Dress has
acquired secondary meaning, there is no need to explore in any
detail the issue of functionality.
The evidence is strong,
however, that most, if not all, of the components of the Trade
Dress, when taken individually, are functional.
This includes
the quilting, its use over substantially all of the bag, the 45degree angle of the square, and perhaps even the size of the
square.
There is also significant evidence that the Trade
Dress, taken as a whole, has aesthetic functionality, and that
giving the Trade Dress protection under the Lanham Act would
place the many competitors who use it or its equivalents at a
significant non-reputation-related disadvantage.
38
At trial, MZ
Wallace took the position that the use of even a 1.5-inch
quilted square oriented at a 45-degree angle would infringe its
Trade Dress.
Similarly, it asserts that the defendants’ use of
polyester and not nylon to make their quilted bags is infringing
and, generally, that synthetic materials that are similar in
appearance to nylon would infringe.
What is clear, is that MZ
Wallace has failed to prove that its Trade Dress is nonfunctional.
Likelihood of Confusion
Even if MZ Wallace had shown that its Trade Dress was
protectable under the Lanham Act, MZ Wallace has failed to
establish that there is a likelihood of consumer confusion.
In
the second stage of Section 43(a) inquiries, courts must
“determine whether [the] defendant's use of a similar mark is
likely to cause consumer confusion.”
F.3d at 217 (citation omitted).
Christian Louboutin, 696
“[A] plaintiff must prove . . .
a probability of confusion, not a mere possibility, affecting
numerous ordinary prudent purchasers” in order to establish a
likelihood of confusion.
Starbucks Corp. v. Wolfe's Borough
Coffee, Inc., 588 F.3d 97, 115 (2d Cir. 2009) (citation
omitted).
In determining whether there is a likelihood of
confusion, courts apply the eight-factor balancing test
introduced in Polaroid Corp. v. Polaroid Elecs. Corp., 287 F.2d
492 (2d Cir. 1961).
The eight factors are:
39
(1) strength of the trademark; (2) similarity of the
marks; (3) proximity of the products and their
competitiveness with one another; (4) evidence that
the senior user may bridge the gap by developing a
product for sale in the market of the alleged
infringer's product; (5) evidence of actual consumer
confusion; (6) evidence that the imitative mark was
adopted in bad faith; (7) respective quality of the
products; and (8) sophistication of consumers in the
relevant market.
Kelly-Brown v. Winfrey, 717 F.3d 295, 307 (2d Cir. 2013)
(citation omitted).
The majority of these factors weigh against MZ Wallace’s
claim.
MZ Wallace has presented no admissible evidence that
goes to actual consumer confusion.
On the other side, Oliver
Thomas has presented expert testimony based on a consumer survey
showing 0% likelihood of consumer confusion.
For the same reasons that the claimed Trade Dress has not
acquired secondary meaning, it is not a strong mark.
products are also not very similar.
The two
Similarity is gauged by
looking “at the general impression created by the marks, taking
into account all factors that potential purchasers will likely
perceive and remember.”
576, 581 (2d Cir. 1991).
Lang v. Ret. Living Pub. Co., 949 F.2d
It is appropriate to consider “the
products' sizes, logos, typefaces, and package designs.”
W.W.W.
Pharm. Co. v. Gillette Co., 984 F.2d 567, 573 (2d Cir. 1993).
MZ Wallace has submitted no evidence that the packaging of the
two products is similar.
The marketing materials produced by
40
both sides show that the Oliver Thomas and MZ Wallace brands
differ significantly in their overall brand look.
have distinctive names.
The brands
Both products bear their own
distinctive logos and non-overlapping design features.
For
instance, MZ Wallace has a diamond-shaped leather logo on the
bottom of its bag and leather trim, often with red accents.
Oliver Thomas touts its products as vegan, includes a nonquilted stripe in the middle of many of its bags, and uses a
crown logo on the front of its bag.
Fashion consumers are
sophisticated purchasers, particularly where the cheaper of the
products costs at least around $100, which also cuts against
likelihood of confusion.
There is no assertion here that the
quality of the products is appreciably different.
Moreover, MZ Wallace and Oliver Thomas bags are not
marketed to the same consumers.
The two brands sell their bags
at significantly different price points and, while both sell
bags wholesale to boutiques, there is no overlap in any brick
and mortar store.
Oliver Thomas is also unlikely to “bridge the
gap” and begin targeting consumers of MZ Wallace bags given that
a founding tenant of the brand was to create bags that sold for
around $100, significantly lower than the price of MZ Wallace
bags.
Oliver Thomas markets itself as a fun brand that does not
take itself overly seriously.
It consistently promotes its
brand with reference to Fuller’s pet dog, also named Oliver
41
Thomas, and whimsically describes this dog as the brand’s “cofounder.”
Oliver Thomas also sells tongue-and-cheek patches
that are intended to allow customers to customize its bags.
For
example, one patch depicts a beer can bearing the words “The
Tears of Mine Enemies.”
In contrast, MZ Wallace promotes a
vision of its brand that is sophisticated, luxurious, and high
fashion.
MZ Wallace’s focus on Oliver Thomas as a threat
appears to be a detour from its overall brand direction.
The factor that MZ Wallace emphasizes is its contention
that Oliver Thomas exhibited bad faith in adopting MZ Wallace’s
Trade Dress.
As explained above, Oliver Thomas intentionally
chose to incorporate some design features of popular MZ Wallace
bags but MZ Wallace has not shown that Oliver Thomas copied its
bags or those features with the intent to capitalize on MZ
Wallace’s reputation and goodwill or to foment confusion between
the two companies’ products.
See Star Indus., 412 F.3d at 388.
State Law Claims
MZ Wallace’s remaining state law claims also fail because
MZ Wallace has failed to show that it has a protectable trade
dress and that there is any likelihood of consumer confusion.
MZ Wallace first claims deceptive acts and practices under
Section 349 of the New York General Business Law.
Section 349
prohibits “[d]eceptive acts or practices in the conduct of any
business ... or in the furnishing of any service in this state.”
42
N.Y. Gen. Bus. Law § 349(a).
The party challenging an act or
practice under Section 349 must show: (1) that the defendant
engaged in a consumer-oriented act, (2) that the consumeroriented act was misleading in a material way, and (3) that the
party consequently suffered injury.
See Stutman v. Chem. Bank,
95 N.Y.2d 24, 29 (2000); see also Conboy v. AT & T Corp., 241
F.3d 242, 258 (2d Cir. 2001).
MZ Wallace has not shown that
Oliver Thomas has misled consumers in any way.
As discussed
above it has presented no evidence that Oliver Thomas acted with
the intention of deceiving customers as to the origin of the
bags, that its adoption of features used in MZ Wallace bags has
created a likelihood of consumer confusion, or that it has
injured MZ Wallace.
MZ Wallace claims dilution and likelihood of injury to
business reputation under Section 360-l of New York General
Business Law.
Section 360–l provides:
Likelihood of injury to business reputation or of
dilution of the distinctive quality of a mark or trade
name shall be a ground for injunctive relief in cases
of infringement of a mark registered or not registered
or in cases of unfair competition, notwithstanding the
absence of competition between the parties or the
absence of confusion as to the source of goods or
services.
N.Y. Gen. Bus. Law § 360–l.
“New York law accords protection
against dilution to marks that are distinctive as a result of
acquired secondary meaning as well as to those that are
43
inherently distinctive.”
N.Y. Stock Exch., Inc. v. New York,
New York Hotel, LLC, 293 F.3d 550, 557 (2d Cir. 2002).
Because
MZ Wallace’s Trade Dress has not acquired secondary meaning, it
cannot be protected under Section 360-l.
MZ Wallace also makes two claims under the common law,
first for trade dress infringement and second for unfair
competition.
The common law claim of unfair competition “shares
many common elements with the Lanham Act claims of false
designation of origin and trademark infringement.”
Pharm. Co., 984 F.2d at 576.
W.W.W.
One of the common elements is
proof of ownership of a protectable mark.
Nabisco, Inc. v.
Warner–Lambert Co., 220 F.3d 43, 45 (2d Cir.2000) (“To prevail
on its trademark infringement and unfair competition claims,
[the plaintiff] must prove that [the mark in question] is a
protectable trademark.”).
Because MZ Wallace has not shown it
has a protectable mark, it cannot succeed on its common law
claims.
Attorneys’ Fees
Oliver Thomas asks for an award of attorneys’ fees under
the fee-shifting provision of the Lanham Act.
1117(a).
15 U.S.C. §
The statute “authorizes the award of attorney's fees
to prevailing parties in ‘exceptional cases.’”
Patsy's Brand,
Inc. v. I.O .B. Realty, Inc., 317 F.3d 209, 221 (2d Cir. 2003)
(citation omitted).
The statute provides only that the district
44
court ‘may’ award attorneys' fees.
Patsy's Italian Rest., Inc.
v. Banas, 658 F.3d 254, 268 (2d Cir. 2011).
This Circuit
applies the Supreme Court’s Octane Fitness, LLC v. ICON Health &
Fitness, Inc., 572 U.S. 545 (2014), standard for determining
whether an award of attorney’s fees is appropriate to
applications for attorneys’ fees under the Lanham Act.
Sleepy's
LLC v. Select Comfort Wholesale Corp., 909 F.3d 519, 531 (2d
Cir. 2018).
Under the Octane Fitness test, “an ‘exceptional’
case is simply one that stands out from others with respect to
the substantive strength of a party's litigating position . . .
or the unreasonable manner in which the case was litigated.”
Octane Fitness, 572 U.S. at 554.
A “case-by-case exercise of [
] discretion, considering the totality of the circumstances,”
determines whether a case is “exceptional.”
Id.
The Court
further suggested that factors considered under a similar
provision in copyright law were relevant to the inquiry.
These
are “frivolousness, motivation, objective unreasonableness (both
in the factual and legal components of the case),” and the
interests of compensation and deterrence.
Id. at 1756 n.6
(citing Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n. (1994)).
Over the last six years, MZ Wallace has used an array of
different attorneys to write cease and desist letters and to
prosecute its applications for registration of a trade dress.
Over and over, it defined its trade dress differently.
45
In this
lawsuit, it pursues what it describes as a narrowed definition.
The Trade Dress defined in the Complaint is not, however, a
narrowed definition.
The only common element in each of these
many articulations of its trade dress has been the use of
quilting.
Frequently, it added the element of diamond quilting.
On a few occurrences, but not before the PTO, it added the use
of nylon.
But, only in this case has it added the features that
the quilting must cover the bag (or substantially all of the
bag) and that the quilting must be of 7/8-inch squares.
A chart
listing the many iterations of its trade dress assertions is
reproduced below.
Given its shifting understanding of the
features that might comprise its trade dress, it is not
surprising that MZ Wallace has utterly failed to show that the
definition of its Trade Dress on which it settled just this year
has achieved secondary meaning.
46
For this reason, among others, MZ Wallace had a very weak
claim to trademark protection in this case.
This weak claim
does not, however, lead inevitably to the conclusion that its
motivation for engaging in this litigation was malevolent.
has not engaged in fraud or acted in bad faith.
Nor did it
conduct this lawsuit in an unreasonable manner.
While its
claims were very weak, they were not frivolous.
It
In short,
Oliver Thomas has not shown that this is an exceptional case in
47
which the principles of compensation and deterrence dictate an
award of attorney’s fees.
In making this application for an award of attorney’s fees
Oliver Thomas emphasizes the evidence of unreasonable and
improper business behaviors on the part of MZ Wallace.
These
include posting or encouraging others to post accusations that
Oliver Thomas’s bags are knock-offs on the Oliver Thomas
Instagram page, implying that Oliver Thomas bags are
“counterfeit and knockoff goods” in its August 2018 letter to MZ
Wallace retail partners, and using threatening and disparaging
language directed at Oliver Thomas representatives at a trade
show.
This business behavior is unsavory and will hopefully
cease, but that improper behavior does not entitle Oliver Thomas
to an award of attorney’s fees due to the filing and prosecution
of this lawsuit.
Similarly, while Oliver Thomas argues that MZ Wallace’s
practice of sending demand letters and submitting weak
applications to the PTO for trademark protection demonstrates
its unreasonableness, these acts alone cannot be said to render
this litigation exceptional.
While weak, Oliver Thomas’s trade
dress arguments were not frivolous or objectively unreasonable.
Oliver Thomas’s request for attorneys’ fees under the Lanham Act
is therefore denied.
48
Conclusion
For the reasons stated in this Opinion, the Clerk of Court
shall enter judgment in favor of Oliver Thomas.
Oliver Thomas’s
claim for an award of attorneys’ fees is denied.
Dated:
New York, New York
December 20, 2018
________________________________
DENISE COTE
United States District Judge
49
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