Rosehoff, Ltd. v. Truscott Terrace Holdings LLC et al
Filing
96
DECISION AND ORDER IT HEREBY IS ORDERED, that Rosehoff's Motion for Summary Judgment as to its second cause of action (Docket No. 55) is GRANTED.FURTHER, that this Court declares that Defendants do not have trade dress rig hts in the plastic bottle depicted in Attachment 1.FURTHER, that Rosehoff's fifth cause of action is DISMISSED for lack of jurisdiction.FURTHER, that Rosehoff's first, third, fourth, sixth, seventh, eighth, ninth and tenth causes of a ction are DISMISSED as MOOT.FURTHER, that Rosehoff's Motion for a Preliminary Injunction (Docket No. 83) is DENIED AS MOOT.FURTHER, that the Clerk of Court is directed to CLOSE this case.SO ORDERED.Signed by William M. Skretny, United States District Judge on 3/27/2020. (JCM)-CLERK TO FOLLOW UP-
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
ROSEHOFF, LTD.,
Plaintiff,
v.
DECISION AND ORDER
TRUSCOTT TERRACE HOLDINGS LLC,
TRUSCOTT TERRACE HOLDINGS GROUP
LLC, TRUSCOTT TERRACE
INTERNATIONAL HOLDINGS GROUP LLC,
GREGORY GANNON, and GORDON
GANNON,
14-CV-277S
Defendants.
I. INTRODUCTION
In this action, Plaintiff Rosehoff, Ltd., (“Rosehoff”) seeks a declaratory judgment
against Defendants, stating that Defendants do not have trade dress rights in a particular
plastic bottle to hold a fuel-enhancement product, or a copyright on the particular label for
that product. Before this Court is Rosehoff’s Motion for Summary Judgment pursuant to
Rule 56 of the Federal Rules of Civil Procedure (Docket No. 55), and its Motion for a
Preliminary Injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure.
(Docket No. 83). For the following reasons, Rosehoff’s motion for summary judgment is
granted, and its motion for a preliminary injunction is denied as moot.
II. BACKGROUND
Unless otherwise noted, the following facts are not disputed for purposes of the
motion for summary judgment. This Court takes the facts in the light most favorable to
Defendants, the non-moving parties. See Mitchell v. City of New York, 841 F.3d 72, 75
1
(2d Cir. 2016) (at summary judgment, a court “views the evidentiary record in the light
most favorable to ... the non-moving party”).
Cataclean is a “chemical compound fuel-enhancement product that cleans
automobile catalytic converters.” (Plaintiff’s Statement of Undisputed Facts, Docket No.
55-2, ¶ 5.) Rosehoff and its subsidiary, System Products UK, Ltd. (“SPUK”), own the rights
to the Cataclean fuel-enhancement product, and Rosehoff holds the U.S. Trademark
Registration for the Cataclean trademark. (Docket No. 55-2, ¶¶ 6-7; Docket No. 57-1, ¶
6.)
In 2008, Russ Baigent, a principal of Rosehoff, along with defendants Gordon
Gannon and Gregory Gannon, formed non-party Cataclean Americas LLC (“CAL”) to
distribute the Cataclean product in North America. (See Docket No. 55-2, ¶ 11; Docket
No. 55-37 at ¶ 1; Docket No. 57-2 at ¶ 52.)
Also in 2008, SPUK entered into a licensing agreement with CAL (“the SPUK
license”), allowing CAL to sell the Cataclean product in North America. (Docket No. 5511 at pp. 2-17.)
From 2008 to either 2010 or 2011, CAL sold Cataclean in an aluminum bottle
manufactured by the Exal corporation (“the Exal bottle”). (Docket No. 55-2, ¶ 5.) The Exal
bottle had a long neck, cylindrical base, and “dual-step” design at the base of the neck.
(Id., ¶ 23.) In July 2010, Gregory Gannon, in consultation with others affiliated with CAL,
and apparently in response to concerns about delivery, denting, and leaking of the Exal
bottle, began to seek a new supplier for the bottle. (Docket No. 55-22 at p. 2.) In a series
of emails, he corresponded with a manufacturer in China to have a new bottle made. 1
1
The parties dispute whether the “history” emails provided by Defendants represent the complete
2
After back-and-forth emails regarding the bottle design, the Chinese manufacturer sent a
bottle sample to Gregory Gannon. Gannon forwarded this sample to Hugh Collins, a
principal of Rosehoff, in August 2010. (Docket No. 57-2 at ¶ 39.)
The parties dispute whether this bottle sample was an exact copy of the Exal bottle
or a new design created by Gregory Gannon. Gannon asked the Chinese manufacturer
to try to come “closer to the image of our existing bottle.” (Docket No. 55-21 at p. 6) At
the same time, Gannon asserts in his affidavit that he made a “critical design modification”
to the Exal bottle and states that the bottle sample he ultimately received from China was
different from the Exal bottle. (Gregory Gannon affidavit, Docket No. 57-2 at ¶¶ 32-37.)
The parties agree that an affiliated UK company then began making plastic bottles using
a mold made from the Chinese bottle sample. (Docket No. 57-2 at ¶ 43; Docket No. 5537 at ¶¶ 17-18.)
On July 10, 2010, Gregory Gannon executed a “non-exclusive license agreement”
with CAL (“the CAL license”), in which Gannon, as licensor, licensed the “proprietary
bottle design” to CAL “for the purpose of packaging the Cataclean chemical product for
distribution by [licensee].”2 (Docket No. 55-24 at p. 2.) Gregory Gannon signed this
agreement as licensor, and co-Defendant Gordon Gannon signed on behalf of the
licensee, CAL. (Id. at p. 5.)
In February 2011, CAL faced a shortage of bottles. In response, CAL’s partners in
the UK, including Rosehoff, sent 2,500 bottles from their inventory for CAL’s use. (Docket
correspondence between Gannon and his Chinese counterparts.
2
Rosehoff disputes the authenticity of this license but assumes its validity for the purpose of its motion for
summary judgment. (See Docket No. 55-1 at p. 13 n. 2.) In the emails Gannon provided from this period,
Gannon does not appear to mention his development of a unique design, or of his licensing this design to
CAL. (See Docket No. 55-21 at pp. 15-28.)
3
No. 55-2 at ¶ 35-36; Docket No. 55-23 at p. 2.) As noted earlier, whether this bottle design
was based on Gannon’s “original design” or was an exact copy of the Exal bottle is
disputed.
In August 2011, SPUK informed CAL that it was terminating the SPUK license
between the parties. (Docket No. 55-1 at p. 10.) The parties disagree whether this
termination was valid, and whether the SPUK license is still in effect. Defendants contend
that it was “irrevocable” until 2023, while Rosehoff argues that it was validly terminated in
2011. (See Docket No. 57-1 at ¶ 10; Docket No. 55-1 at p. 10.)
Defendants contend that CAL continued to operate and to sell the Cataclean
product in the plastic bottle from April 2011 to April 2013. (Docket No. 55-2 at ¶ 50.) CAL
sold approximately 300,000 units of Cataclean in the plastic bottle. (Id.) The record does
not indicate what mold was used to make the bottles, who manufactured them, or the
exact number of units sold. CAL ceased to function after a distribution agreement with
Prestolite ended. (Docket No. 57-2 at ¶¶ 52-53.) Rosehoff thereafter entered into new
licensing agreements with other distributors—including Prestolite and Holley Products—
to sell the Cataclean product. (Docket No. 83-2 at ¶¶ 12-13.)
In 2012, Defendants Gregory and Gordon Gannon formed defendant Truscott
Terrace Holdings LLC (“TTH”), pursuant to Nevada law. (Docket No. 55-13 at p. 2.) On
June 27, 2013, Gregory Gannon assigned his rights in the plastic bottle to TTH. (Docket
No. 55-25 at p. 2.)
On January 2, 2014, TTH, through outside counsel, sent cease-and-desist letters
to Rosehoff, and to many of Rosehoff’s customers, licensees, and suppliers. (Complaint,
Docket No. 1, ¶¶ 24-25.) These letters stated that TTH believed it had trade dress rights
4
in the plastic bottle for the Cataclean product, and that it would pursue “any and all legal
remedies available for trademark infringement and dilution…and unfair competition.” (Id.,
¶ 24.) (see also Docket No. 55-19 at pp. 2 -16.) The letters demanded that Rosehoff and
its licensees cease using the bottle, destroy all bottles in inventory, account for all sales
using the bottle, and remove all bottle images from their promotional materials. (Id.)
On August 15, 2018, Gordon Gannon, as “the new Managing Member of CAL,”
sent a letter to Holley Performance Products, informing Holley that it was violating CAL’s
intellectual property rights by selling Cataclean, and that Holley—and its predecessor
Prestolite—had been doing so since May 2013. (Docket No. 83-3 at p. 2.) The letter stated
that “a company controlled by members of CAL also owns… the trademark in the United
States to the standard 16 ounce bottle in which Cataclean is sold.” (Id.) The letter further
stated that CAL took its intellectual property rights seriously, but was “willing to discuss a
resolution,” including a renewal of the distribution arrangement, “in lieu of seeking
injunctive relief, monetary damages, punitive treble damages, and attorney’s fees.” (Id. at
p. 3.)
The parties have engaged in litigation on many fronts. 3 Relevant to the trade dress
in question here, TTH has attempted several times to register the plastic bottle with the
United States Patent and Trademark Office (“PTO”). TTH filed United States Trademark
Application No. 86159235 (“the ‘235 application”) on January 7, 2014, seeking entry on
the Principal Register. (Docket No. 55-2 at p. 8; Docket No. 55-26 at pp. 2-8) The PTO
refused to register the plastic bottle because it was a nondistinctive product that could
3
These include a case in New York state court regarding the termination of the SPUK license, a case
dismissed in this district regarding the arbitration clause in the SPUK license, and a challenge before the
Trademark Trial and Appeal Board. (See Docket No. 57-1, ¶ 10.)
5
only be registered with proof of acquired distinctiveness. (Docket No. 55-27 at p. 3.)
On March 10, 2015, TTH filed U.S. Trademark Application No. 86559730 (“the ‘730
application.”) for the same bottle design. On June 26, 2015, the PTO refused to register
the bottle, for the same reasons as it rejected the ‘235 application. (Docket No. 55-2 at p.
9.) TTH amended the ‘730 application, and on February 5, 2016, the PTO issued a finding
that the mark included functional elements that could not be protected as trademark under
any circumstances. (Docket No. 55-31 at p. 3.) Specifically, the PTO found that the long
neck was functional because it was “ideal” for dispensing fluids directly into fuel tanks.
(Id.)
TTH then sought registration on the Supplemental Register. The ‘730 application
was registered on the Supplemental Register on May 17, 2016. (“the ‘739 registration.”)
(Docket No. 83-5 at p. 2.) On the same day, Rosehoff filed a petition before the Trademark
Trial and Appeals Board (“TTAB”) for cancellation of the ‘739 registration on grounds of
non-use, genericness, and fraud. (Docket No. 83-6 at p. 2.) TTH moved to suspend the
cancellation proceedings, and Rosehoff consented. (Docket No. 83-7 at p. 3.) The TTAB
cancellation action is stayed pending this Court’s decision on the matter before it. (Id.)
III. DISCUSSION
Rosehoff seeks summary judgment on its request for a declaratory judgment that
Defendants do not have trade dress rights in the plastic bottle or a copyright on the label.
It argues that the bottle trade dress is not protectable because it is functional and has not
acquired secondary meaning. Rosehoff also seeks a preliminary injunction barring
Defendants from sending cease-and-desist letters based on their alleged rights in the
6
plastic bottle to Rosehoff or its licensees, suppliers, customers, or business associates.
Defendants oppose Rosehoff’s motions, arguing that there are genuine issues of
material fact that preclude a determination of their trade dress rights at this stage, and
that Rosehoff has not shown the likelihood of success on the merits necessary for the
issuance of a preliminary injunction.
A.
Dismissal of Moot Claims
Rosehoff’s complaint brings ten causes of action against Defendants. Rosehoff
seeks declaratory judgment that Defendants’ Trade Dress application No. 86159235 is
invalid (First Cause of Action); that the Defendants’ alleged trade dress rights in the plastic
bottle are unenforceable (Second Cause of Action); that Defendants’ alleged trade dress
rights in “the Label” for the plastic bottle are unenforceable (Third Cause of Action); that
Defendants’ alleged trade dress rights in “the Chassis Label” are not enforceable (Fourth
Cause of Action); that Defendants’ Copyright Registration No. VA 1-887-971 for “the
Label” is invalid (Fifth Cause of Action); that Defendants’ alleged rights in “the Label” are
not protectable by copyright (Sixth Cause of Action); that Defendants’ alleged rights in
“the Chassis Label” are not protectable by copyright (Seventh Cause of Action); that
Defendants’ United Kingdom Design Registration No. 4033752 is invalid (Eighth Cause
of Action); that Defendants’ alleged United Kingdom design rights are unenforceable
(Ninth Cause of Action); and that Defendants do not have any rights in their pending
United States Patent Application No. 13/537,253 (Tenth Cause of Action).
Rosehoff argues that the only two remaining claims are the second and fifth—the
question of Defendants’ trade dress rights in the plastic bottle and Defendants’ copyright
rights in “the Label,” also referred to as “the private label.” (Docket No. 55-1 at p. 9.)
7
Defendants state that all causes of action besides the trade dress rights in the bottle
(Second Cause of Action) are moot because they no longer claim rights in the trademark
applications or copyright or trade dress rights in the labels, and because the parties have
agreed not to pursue UK claims in this action. (Docket No. 57 at p. 2.) Consequently, this
Court will dismiss Plaintiff’s First, Third, Fourth, Sixth, Seventh, Eighth, Ninth, and Tenth
Causes of Action as moot. The Second and Fifth Causes of Action are resolved on the
merits below.
B.
Declaratory Judgment
Under the Declaratory Judgment Act, a district court has jurisdiction to hear an
action for declaratory relief only when a case presents an “actual controversy.” 28 U.S.C.
§ 2201(a). “The question in each case is whether the facts alleged, under all the
circumstances, show that there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a
declaratory judgment.” Islam v. Davis, No. 117CV776MADDJS, 2018 WL 8731540, at *1–
2 (N.D.N.Y. May 21, 2018) (quoting MedImmune, Inc. v. Genetech, Inc., 549 U.S. 118,
127, 127 S. Ct. 764, 771, 166 L. Ed. 2d 604 (2007)).
The Supreme Court requires that the dispute be
definite and concrete, touching the legal relations of the parties having
adverse legal interests; and that it be real and substantial and admit of
specific relief through a decree of a conclusive character as distinguished
from an opinion advising what the law would be upon a hypothetical state
of facts.
MedImmune, 549 U.S. at 127 (quoting Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 57
S. Ct. 461, 81 L. Ed. 617 (1937)).
District courts have substantial discretion in deciding whether to declare the rights
8
of litigants. Classic Liquor Imps., Ltd. v. Spirits Int'l B.V., 151 F. Supp. 3d 451, 454–55
(S.D.N.Y. 2015) (citing Peconic Baykeeper, Inc. v. Suffolk Cty., 600 F.3d 180, 187 (2d
Cir. 2010)). The Second Circuit has held that a “declaratory judgment action should be
entertained when the judgment will serve a useful purpose in clarifying and settling the
legal relations in issue, and ... when it will terminate and afford relief from the uncertainty,
insecurity, and controversy giving rise to the proceeding.” Fort Howard Paper Co. v.
William D. Witter, Inc., 787 F.2d 784, 790 (2d Cir.1986).
Declaratory judgment actions can be “particularly useful in resolving trademark
disputes, in order to promptly resolve controversies where the alleged owner of a
trademark right threatens to sue for infringement,” and, as such “the finding of an actual
controversy should be determined with some liberality” in such a case. Starter Corp. v.
Converse, Inc., 84 F.3d 592, 596 (2d Cir.1996). A more restrictive view could require a
party “to go to substantial expense in the manufacture, marketing, and sale of its [product],
and subject itself to considerable liability for a violation of the Lanham Act before its right
to even engage in this line of commerce could be adjudicated.” Classic Liquor, 151 F.
Supp. 3d at 455.
Courts apply a totality-of-the-circumstances test to determine whether there is a
true controversy and make fact-based determinations regarding whether the controversy
is sufficient. Nike, Inc. v. Already, LLC, 663 F.3d 89, 96 (2d Cir. 2011), aff'd, 568 U.S. 85,
133 S. Ct. 721, 184 L. Ed. 2d 553 (2013). A court may consider the threat of future
litigation and the existence of an aggressive litigation strategy. Id. (citing MedImmune,
549 U.S. at 128) (“the threat of future litigation remains relevant in determining whether
an actual controversy exists”); Diamonds.net LLC v. Idex Online, Ltd., 590 F. Supp. 2d
9
593, 598 (S.D.N.Y. 2008) (“While a threat of suit is not necessary to declaratory judgment
jurisdiction, an aggressive litigation strategy ... may signal the existence of an actual
controversy.”).
Courts also consider cease-and-desist letters and proceedings before the TTAB
when determining whether a controversy exists. See, e.g., Surefoot LC v. Sure Foot
Corp., 531 F.3d at 1247 (10th Cir. 2008) (finding a controversy in light of “five separate
TTAB oppositions combined with an extensive history of interactions between the parties
in which the declaratory defendants expressly and repeatedly suggested historical and
existing infringing activity by the declaratory plaintiff”); Blue Athletic, Inc. v. Nordstrom,
Inc., No. 10 Civ. 036, 2010 WL 2836303, at *4 (D.N.H. July 19, 2010) (“[T]he combination
of two demand letters and formal TTAB opposition on infringement grounds, all steeped
in the language of trademark infringement, is sufficient to meet the MedImmune
standard.”); Venugopal v. Sharadha Terry Prods, Ltd., No. 07 Civ. 00484C, 2009 WL
1468462, at *4 (W.D.N.Y. May 22, 2009) (finding jurisdiction where the defendant
asserted in cease-and-desist letter to plaintiff that it believed use of the plaintiff's
trademark would infringe on the defendant's use of its own trademark and subject plaintiff
to liability for trademark infringement and unfair competition).
Rosehoff argues that Defendants’ cease-and-desist letters create a justiciable
controversy and demonstrate an adversity of interests. It further argues that the letters
cause fear and confusion in its licensees and customers, by threatening litigation and by
calling into question whether Rosehoff is even entitled to license its product. (Docket No.
55-1 at p. 18-19.) Rosehoff argues that this uncertainty harms its business relationships.
(Id. at 19.)
10
Defendants argue that their 2014 letters did not cause injury, and, regardless, were
sent by their former counsel. (Docket No. 86, ¶ 21.) They argue that the August 15, 2018
letter is not a cease-and-desist letter, but rather, a “notice of CAL’s property rights,” and
an invitation to undertake negotiations.” (Id., ¶ 24.)
Having fully examined the record, this Court finds that there is a sufficient
controversy regarding the trade dress rights in the plastic bottle to exercise jurisdiction
under the Declaratory Judgment Act. The parties’ ongoing litigation in numerous fora on
the question of trade dress rights demonstrates the adversity of interests between them.
Defendants’ cease-and-desist letters alleging an intent to “enforce trademark rights”
unless the recipients enter new licensing agreements with them, when recipients already
license both product and bottle from Rosehoff (or its affiliates), creates both a controversy
regarding who possesses trade dress rights in the bottle and confusion among licensees.
A declaratory judgment will “clarify[] and settl[e] the legal relations in issue, and ... will
terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to
the proceeding.” Fort Howard Paper, 787 F.2d at 790. Accordingly, this Court finds proper
jurisdiction under the Declaratory Judgment Act to resolve the question of trade dress
rights in the plastic bottle.
As for Rosehoff’s request for a declaratory judgment that Defendants have no
copyright in the “private label,” Defendants state clearly that they are not claiming any
rights in that regard. (Defendants’ Statement of Undisputed Facts, Docket No. 57-1 at ¶¶
51-52.) Consequently, there is no legal adversity here, and no controversy warranting a
declaratory judgment on the copyright issue. The Fifth Cause of Action will therefore be
dismissed for want of jurisdiction under the Declaratory Judgment Act.
11
C.
Summary Judgment
Rosehoff has moved for summary judgment on the question of whether
Defendants have trade dress rights in the plastic bottle. Defendants maintain that
disputed issues of material fact preclude summary judgment.
1. Rule 56 (a)
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56 (a). A fact is “material” if it “might affect the outcome of the suit
under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct.
2505, 91 L. Ed. 2d 202 (1986). An issue of material fact is “genuine” if “the evidence is
such that a reasonable jury could return a verdict for the nonmoving party.” Id.
In deciding a motion for summary judgment, the evidence and the inferences
drawn from the evidence must be "viewed in the light most favorable to the party opposing
the motion." Addickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S. Ct. 1598, 26 L.
Ed. 2d 142 (1970). "Only when reasonable minds could not differ as to the import of
evidence is summary judgment proper." Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir.
1991). Indeed, “[i]f, as to the issue on which summary judgment is sought, there is any
evidence in the record from which a reasonable inference could be drawn in favor of the
opposing party, summary judgment is improper.” Sec. Ins. Co. of Hartford v. Old
Dominion Freight Line, Inc., 391 F.3d 77, 82–83 (2d Cir. 2004) (citations omitted).
But a “mere scintilla of evidence” in favor of the nonmoving party will not defeat
summary judgment. Anderson, 477 U.S. at 252. A nonmoving party must do more than
cast a “metaphysical doubt” as to the material facts, Matsushita Elec. Indus. Co. v. Zenith
12
Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); it must “offer
some hard evidence showing that its version of the events is not wholly fanciful,” D’Amico
v. City of N.Y., 132 F.3d 145, 49 (2d Cir. 1998). That is, there must be evidence from
which the jury could reasonably find for the nonmoving party. Anderson, 477 U.S. at 252.
In the end, the function of the court at the summary judgment stage is not “to weigh
the evidence and determine the truth of the matter but to determine whether there is a
genuine issue for trial." Id. at 249. “Assessments of credibility and choices between
conflicting versions of the events are matters for the jury, not for the court on summary
judgment.” Rule v. Brine, Inc., 85 F.3d 1002, 1011 (2d Cir. 1996).
2. Trade Dress Rights
Rosehoff argues that the bottle in which Defendants claim trade dress rights is not
protectable because it is functional and non-distinctive, and because Defendants have
not used it in commerce. Defendants maintain that they have used the bottle in commerce
and that they are not required to prove acquired distinctiveness, that is, secondary
meaning, at this stage.
a. Legal Standards
The Lanham Act defines the term “trademark” as “any word, name, symbol, or
device, or any combination thereof” used by any person “to identify and distinguish his or
her goods… from those manufactured or sold by others and to indicate the source of the
goods.” 15 U.S.C. § 1127. This definition includes not only source-identifying words or
marks, but “trade dress.” Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 117 (2d Cir.
2001. 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.,
13
269 F.3d 114, 118 (2d Cir. 2001). Trade dress as a category “originally included only the
packaging, or ‘dressing,”’ of a product, but in recent years has been expanded by many
Courts of Appeals to encompass the design of a product.” Wal-Mart Stores, Inc. v.
Samara Bros., 529 U.S. 205, 209, 120 S. Ct. 1339, 1342, 146 L. Ed. 2d 182 (2000). Trade
dress is thus the “overall composition and design [of a product], including size, shape,
color, texture, and graphics.” Waddington N. Am. Bus. Trust v. EMI Plastics, Inc., 02-CV3781, 2002 WL 2031372, at *2 (E.D.N.Y. Sept. 5, 2002) (quoting Coach Leatherware Co.,
Inc. v. AnnTaylor, Inc., 933 F. 2d 162, 167 (2d Cir. 1991)); see also Yurman Design, 262
F.3d at 114 (trade dress includes “the design or configuration of the product itself”); FunDamental Too, Ltd. v. Gemmy Indus. Corp., 111 F.3d 993, 999 (2d Cir. 1997) (“The
concept of trade dress encompasses the design and appearance of the product together
with all the elements making up the overall image that serves to identify the product
presented to the consumer.”).
It is well established that trade dress can be protected under federal law.
The design or packaging of a product may acquire a distinctiveness which
serves to identify the product with its manufacturer or source; and a design
or package which acquires this secondary meaning, assuming other
requisites are met, is a trade dress which may not be used in a manner
likely to cause confusion as to the origin, sponsorship, or approval of the
goods. In these respects protection for trade dress exists to promote
competition.
TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 28, 121 S. Ct. 1255, 1259, 149
L. Ed. 2d 164 (2001)
To have a protectable trade dress right, a party must have used the trade dress in
commerce, and must demonstrate that its trade dress is both distinctive as to the source
of the product and non-functional. See Landscape Forms, Inc. v. Columbia Cascade Co.,
113 F.3d 373, 377 (2d Cir.1997); Maharishi Hardy Blechman Ltd. v. Abercrombie & Fitch
14
Co., 292 F.Supp.2d 535, 541 (S.D.N.Y. 2003); Yurman Design, 275 F.Supp.2d at 510; 15
U.S.C. § 1125(a).
Trade dress rights arise from the use of the trade dress in commerce. See Int’l
Healthcare Exch., Inc. v. Global Healthcare Exch., LLC, 470 F. Supp. 2d 365, 370
(S.D.N.Y. 2007) (“In the absence of federal registration [of a mark], prior ownership of a
mark is only established as of the first actual use of a mark in a genuine commercial
transaction.”) (quoting Allard Enterprises v. Advanced Programming Resources, 146 F.3d
350, 358 (6th Cir. 1998)). This is because “[t]he Lanham Act does not create the … right;
it only recognizes the right acquired through use.” La Societe Anonyme des Parfums Le
Galion v. Jean Patou, Inc., 495 F.2d 1265, 1270 n.5 (2d Cir. 1974); see also Jaffe v.
Simon & Schuster Inc., 3 U.S.P.Q 2d 1047, 1049 (S.D.N.Y. 1987) (“[T]he fact that the
plaintiff was the first to file an application to register the mark does not bolster his case.
Ownership of a mark is not determined by the race to the [PTO], but by the race to the
market.”). A “bona fide” commercial use must be followed by “activities proving a
continuous effort or intent to use the mark.” Chance v. Pac–Tel Teletrac, Inc., 242 F.3d
1151, 1156–57 (9th Cir.2001); see also Personal Publ’ns, Inc. v. Sagittarious Broad.
Corp., No. 95 Civ. 4333(DLC), 1996 WL 734902, at *3 (S.D.N.Y. Dec. 24, 1996).
The use-in-commerce requirement can be met by a licensee using a mark on
behalf of a licensor. Hawaii-Pac. Apparel Grp., Inc. v. Cleveland Browns Football Co.
LLC, 418 F. Supp. 2d 501, 506 (S.D.N.Y. 2006) (citing 2 J. Thomas McCarthy, McCarthy
on Trademarks & Unfair Competition § 18.46 (4th ed. 2004) (“Ownership rights in a
trademark ... can be acquired and maintained through the use of the mark by a controlled
licensee even when the first and only use of the mark was made ... by the licensee.”)).
15
Further, “[t]o be entitled to protection under the [Lanham] Act, plaintiff’s trade dress
must either be inherently distinctive or be shown to have acquired distinctiveness through
‘secondary meaning.’” Landscape Forms, 113 F.3d at 377 (quoting Two Pesos, Inc. v.
Taco Cabana, Inc., 505 U.S. 763, 774, 112 S. Ct. 2753, 2759-60, 120 L. Ed. 2d 615
(1992)). “In either case, it is the ability of the trade dress to designate a product source
that is decisive.” New Colt Holding Corp. v. RJG Holdings of Fla., Inc., 312 F.Supp.2d
195, 206 (D. Conn. 2004).
But for product design cases, the Supreme Court has stated that “a product’s
design is distinctive, and therefore protectible, only upon a showing of secondary
meaning.” Samara Bros., 529 U.S. at 216 (emphasis added). Therefore, because trade
dress rights in the plastic bottle’s product design are at issue, Defendants must establish
secondary meaning. See id.; Maharishi Hardy, 292 F.Supp.2d at 541 (“In product design
cases such as this one, however, the Supreme Court has held that the plaintiff must
always make the more difficult showing of ‘acquired distinctiveness.”) (quoting Samara
Bros., 529 U.S. at 216)).
Trade dress has “acquired distinctiveness” if it has developed secondary meaning.
Samara Bros., 529 U.S. at 211. Secondary meaning occurs when, “in the minds of the
public, the primary significance of a product feature or term is to identify the source of the
product rather than the product itself.” Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S.
844, 851 n.11, 102 S. Ct. 2182, 72 L. Ed. 2d 606 (1982) (citing Kellog Co. v. Nat’l Biscuit
Co., 305 U.S. 111, 118, 59 S. Ct. 109, 115, 83 L. Ed. 73 (1938)); see also Samara Bros.,
529 U.S. at 211 n. 1 (explaining that secondary meaning, which originated as a word mark
concept, has “come to refer to the acquired, source-identifying meaning of a nonword
16
mark as well”). Defendants therefore must set forth evidence that “over time, the trade
dress has become identified with its producer in the minds of potential consumers.” L. &
J.G. Stickley, Inc. v. Canal Dover Furniture Co., 79 F.3d 258, 263 (2d Cir. 1996).
Whether trade dress has acquired secondary meaning is a question of fact.
Waddington, 2002 WL 2031372, at *5. The factors to be considered, none of which is
dispositive, are as follows: “(1) advertising expenditures, (2) consumer studies linking the
mark to source, (3) unsolicited media coverage of the product, (4) sales success, (5)
attempts to plagiarize the mark, and (6) length and exclusivity of the mark’s use.” Centaur
Commc’ns, Ltd. v. A/S/M Commc’ns, Inc., 830 F.2d 1217, 1222 (2d Cir. 1987), overruled
on other grounds as recognized by, Bristol-Myers Squibb Co. v. McNeill-P.P.C., Inc., 973
F.2d 1033, 1044 (2d Cir. 1992); see also Genesee Brewing Co. v. Stroh Brewing Co.,
124 F.3d 137, 143 n. 4 (2d Cir. 1997); Fibermark, Inc. v. Brownville Specialty Paper
Prods., Inc., No. 7:02-CV-0517, 2005 WL 1173562, at *5 (N.D.N.Y. May 11, 2005); New
Colt Holding, 312 F.Supp.2d at 206 (noting that no single factor is determinative and every
factor need not be proven).
Notwithstanding distinctiveness, no protection under the Lanham Act is available
if the claimed trade dress is functional. Samara Bros., 529 U.S. at 216 (“It is true, of
course, that the person seeking to exclude new entrants would have to establish the
nonfunctionality of the design feature . . .”); see also Nora Beverages, 269 F.3d at 118
(“trade dress is protected under the Lanham Act if it is not functional and if it is either
inherently distinctive or has acquired secondary meaning in the marketplace”); Fibermark,
2005 WL 1173562, at *3 (“Even if Plaintiff can demonstrate that its trade dress is entitled
to protection, there can be no liability if the feature is functional.”); 15 U.S.C. § 1125(a)(3).
17
This is because “[i]t is the province of patent law, not trademark law, to encourage
invention by granting investors a monopoly over new product designs or functions for a
limited time . . . after which competitors are free to use the invention.” Qualitex, 514 U.S.
at 164. Therefore, designs that are functional are not entitled to trade dress protection.
See 15 U.S.C. § 1125(a)(3).
“A product feature is functional, and cannot serve as a trademark, if it is essential
to the use or purpose of the article or if it affects the cost or quality of the article.” Yurman
Design, 262 F.3d at 116 (quoting TrafFix, 532 U.S. at 32) (internal quotation marks
omitted). In cases involving an aesthetic feature, the dress is also functional if the right to
use it exclusively “would put competitors at a significant non-reputation-related
disadvantage.” TrafFix, 532 U.S. at 32. “Where an ornamental feature is claimed as a
trademark and trademark protection would significantly hinder competition by limiting the
range of adequate alternative designs, the aesthetic functionality doctrine denies such
protection.” Maharishi Hardy, 292 F. Supp. 2d at 542–43 (quoting Wallace Int'l
Silversmiths, Inc. v. Godinger Silver Art Co., Inc., 916 F.2d 76, 81 (2d Cir.1990)). The
purpose of the functionality doctrine “is to prevent advances in functional design from
being monopolized by the owner of [the mark] ... in order to encourage competition and
the broadest dissemination of useful design features.” Christian Louboutin S.A. v. Yves
Saint Laurent Am. Holdings, Inc., 696 F.3d 206, 224 (2d Cir. 2012) (internal emphasis
omitted).
The Second Circuit Court of Appeals has warned district courts to exercise
“particular caution” when extending protection to product designs. Landscape Forms,
113 F.3d at 380. This is because most product designs are not intended to identify the
18
source of the product, but rather, are intended to enhance the product by making it more
useful or appealing. See Samara Bros., 529 U.S. at 213 (“In the case of product design,
as in the case of color, we think consumer predisposition to equate the feature with the
source does not exist.”) The danger is that “granting trade dress protection to an ordinary
product design would create a monopoly in the goods themselves,” which would defeat
the “strong federal policy in favor of vigorously competitive markets.” Landscape Forms,
113 F.3d at 379, 380.
b. Defendants have submitted no evidence from which a reasonable
factfinder could conclude that the plastic bottle is entitled to trade
dress protection
Rosehoff argues that Defendants do not have trade dress rights in the plastic bottle
because (1) the bottle is generic, (2) Defendants have not used it in commerce, (3) it is
functional, and (4) it does not have secondary meaning. Defendants argue that they have
used the bottle in commerce, because CAL’s use accrued to Gannon, the bottle’s
licensor, and because Gannon later assigned his rights in the bottle to TTH. Defendants
do not argue that the bottle is nonfunctional, nor do they present any evidence of
secondary meaning.
Images of the plastic bottle can be found at Attachment 1, which contains an image
of the plastic bottle underneath an image of an aluminum bottle. These images were
attached to the assignment of rights from Gregory Gannon to TTH. (Docket No. 55-25 at
p. 5.) The present decision concerns only the plastic bottle depicted in Attachment 1.
This Court need not linger on each of the elements of trade dress because
Defendants concede that they cannot establish secondary meaning for the plastic bottle,
and they have offered no evidence on that element. (See Docket No. 57 at p. 8-9.) Without
19
a showing of secondary meaning, there can be no trade dress protection. See Samara
Bros., 529 U.S. at 216 (finding that a product design trade dress is protectable only upon
a showing of secondary meaning).
In its statement of undisputed facts, Rosehoff states that “[n]either the Gannons
nor Truscott have sold a single unit of any product bearing their own trademark, including
the Plastic Bottle.” (Docket No. 55-2 at ¶ 2.) Rosehoff also asserts that Defendants have
not advertised the plastic bottle or obtained any media coverage or consumer surveys
regarding it. (Id. at ¶ 18.)
In response, Defendants do not present any evidence suggesting that the bottle
has acquired distinctiveness. Instead, they argue that TTH and the Gannons need not
establish secondary meaning, because CAL’s sales of the bottle establish TTH’s rights. 4
But Defendants do not set forth any evidence that CAL established secondary meaning
in the bottle, either. Trade dress is protectable only if the elements making up the trade
dress at issue identify the source of the goods. See Fabrication Enters. v. Hygenic Corp.,
64 F.3d 53, 35 U.S.P.Q.2d 1753, 1756 (2d Cir. 1995). As discussed above, evidence of
secondary meaning can be advertising expenditures, consumer studies linking the mark
to source, unsolicited media coverage of the product, sales success, attempts to
plagiarize the mark, and length and exclusivity of the mark’s use. Centaur Commc’ns,
830 F.2d at 1222. Defendants do not offer any evidence that the design of the bottle has
achieved secondary meaning, whether for TTH, Gregory or Gordon Gannon, or CAL.
Instead, Defendants argue that they are not required to come forth with evidence
4
Because there are issues of fact regarding the validity of the license by which CAL’s sales of the bottle
accrued to Gregory Gannon’s benefit, this Court will not address the issue here.
20
of secondary meaning because the design is on the Supplemental Register, and they
should be afforded more time to establish secondary meaning. (Docket No. 57 at p. 9.)
But this is inconsistent with Defendants’ acknowledgement in their papers that secondary
meaning is presently at issue. (“the Plastic Bottle has acquired secondary meaning and
distinctiveness”). (See Docket No. 57-1 at p. 5.) And their argument that they should be
given time to establish secondary meaning is an admission that there is no secondary
meaning at this time.
Further, the plastic bottle’s registration on the Supplemental Register does not
suffice to defeat Rosehoff’s motion for summary judgment. “[E]ven descriptive terms can
be registered on the Supplemental Register without proof of secondary meaning, as long
as they are deemed capable of acquiring such meaning.” Loctite Corp. v. Nat'l Starch &
Chem. Corp., 516 F. Supp. 190, 203 (S.D.N.Y. 1981). The presence of a mark on the
supplemental register, in fact, “indicates a preliminary determination that the mark is not
distinctive of the applicant's goods.” Fashion Week, Inc. v. Council of Fashion Designers
of Am., Inc., No. 16-CV-5079 (JGK), 2016 WL 4367990, at *6 (S.D.N.Y. Aug. 12, 2016)
(emphasis added) (citing 3 McCarthy on Trademarks § 19:36 (4th ed.)). See also E.T.
Browne Drug Co. v. Cococare Prods, Inc., 538 F.3d 185, 87 U.S.P.Q.2d 1655 (3d Cir.
2008) (a plaintiff with only a Supplemental Registration has the burden to prove “the
existence of a protectable mark.”); In re Federated Dep't Stores, 3 U.S.P.Q.2d 1541
(T.T.A.B. 1987) (“It is overwhelmingly agreed that a Supplemental Register registration is
evidence of nothing more than the fact that the registration issued on the date printed
thereon. … It is entitled to no presumptions of validity, ownership or priority.”).
Under ordinary circumstances, a party on the Supplemental Register may continue
21
establishing secondary meaning for its mark. See Jewish Sephardic Yellow Pages, Ltd.
v. DAG Media, Inc., 478 F. Supp. 2d 340, 347 (E.D.N.Y. 2007) (“While registration on the
Supplemental Register is not evidence of ownership, validity, or the exclusive right to use,
such registration enables the registrant, inter alia, to sue for infringement in federal court
... If, through continuous use in commerce, the mark acquires “secondary meaning”—that
is, the mark comes to be uniquely associated with its source—it becomes eligible for
registration on the Principal Register.”) (citing 15 U.S.C. § 1052(f); Catherine Rowland,
“2003 Trademark Law Decisions of the Federal Circuit,” 53 Am. U. L. Rev. 909, 925 n.
137 (2004)).
But given the posture of this case, Rosehoff’s motion for summary judgment
requires Defendants to make at least some showing from which a reasonable trier of fact
could conclude that the bottle has secondary meaning. Product design trade dress is,
after all, not protectable without a showing of secondary meaning. Samara Bros., 529
U.S. at 216. Absent evidence of secondary meaning, no jury could reasonably find for
Defendants. See Anderson, 477 U.S. at 252. Rosehoff is therefore entitled to summary
judgment on its declaratory judgment claim that Defendants have no trade dress rights in
the plastic bottle at issue.
D.
Preliminary Injunction
Rosehoff has moved for a Preliminary Injunction enjoining Defendants from
sending cease-and-desist letters to Rosehoff’s licensees or business associates during
the pendency of this litigation. Because this Court is granting Rosehoff’s motion summary
judgment and declaring that Defendants do not have trade dress rights in the plastic
bottle, Rosehoff’s motion for a preliminary injunction barring letters asserting those trade
22
dress rights is denied as moot.
IV. CONCLUSION
For the reasons stated above, Rosehoff’s Motion for Summary Judgment is
granted. And because this decision resolves the issue underlying the cease-and-desist
letters, Plaintiffs’ Motion for a Preliminary Injunction will be denied as moot.
V. ORDERS
IT HEREBY IS ORDERED, that Rosehoff’s Motion for Summary Judgment as to
its second cause of action (Docket No. 55) is GRANTED.
FURTHER, that this Court declares that Defendants do not have trade dress rights
in the plastic bottle depicted in Attachment 1.
FURTHER, that Rosehoff’s fifth cause of action is DISMISSED for lack of
jurisdiction.
FURTHER, that Rosehoff’s first, third, fourth, sixth, seventh, eighth, ninth and tenth
causes of action are DISMISSED as MOOT.
FURTHER, that Rosehoff’s Motion for a Preliminary Injunction (Docket No. 83) is
DENIED AS MOOT.
FURTHER, that the Clerk of Court is directed to CLOSE this case.
SO ORDERED.
Dated:
March 27, 2020
Buffalo, New York
s/William M. Skretny
WILLIAM M. SKRETNY
United States District Judge
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Attachment 1
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