Coach, Inc. et al v. Island Rayz et al
Filing
39
ORDER granting plaintiffs' 36 Motion for Partial Summary Judgment and request for a hearing on damages. A hearing is hereby set for 6/12/2013 at 9:30 am in Courtroom 708. The Clerk of Court is directed to provide a copy of this Order setting notice of hearing to defendants via certified mail. Signed by Magistrate Judge Karen L. Litkovitz on 4/11/2013. (art)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
COACH, INC., et al.,
Plaintiffs,
Case No. 1:11-cv-478
Litkovitz, M.J.
vs.
ISLAND RAYZ, et al.,
Defendants.
ORDER
This matter is before the Court on plaintiffs' motion for partial summary judgment (Doc.
36), to which defendants Tara K. McDonald and Ray T. McDonald, proceeding prose, and
Island Rayz have not responded.
I. Background
On March 13, 2013, the Court ordered defendants to show cause, in writing and within
fourteen days, why the plaintiffs' motion for partial summary judgment should not be construed
as unopposed and granted for the reasons stated in plaintiffs' motion. (Doc. 38). To date, more
than fourteen days later, defendants have not responded to the Show Cause Order or to plaintiffs'
motion. For the following reasons, the Court finds that granting partial summary judgment in
plaintiffs' favor is appropriate.
Plaintiffs, Coach, Inc. and Coach Services, Inc. (Coach), allege that defendants are liable
for false advertising, trademark dilution, and the sale of counterfeit products bearing the Coach,
Inc. trademark in violation of Sections 32, 43(a), 43(c) ofthe Lanham Act, 15 U.S.C. §§ 1114,
1125(a), and 1125(c), and for copyright infringement under the United States Copyright Act, 17
U.S.C. § 501 et seq. Plaintiffs also raise Ohio state law claims of trademark infringement,
deceptive trade practices, trademark violations, and unjust enrichment. (Doc. 1). Plaintiffs move
for partial summary judgment on the issue ofliability only on their Section 32 Lanham Act
claim, 15 U.S.C. § 1114, asserting there is no issue of material fact regarding the defendants'
sale of counterfeit goods and infringement of plaintiffs' protected trademarks and copyrights.
Plaintiffs support their motion with: the affidavit of in-house counsel for Coach, Inc., Ethan Lau,
Esq.; deposition testimony of defendant Tara McDonald; deposition testimony of defendant Ray
McDonald; and the affidavit of Robert L. Hope, a private investigator retained by plaintiffs to
investigate the sale of counterfeit Coach products at Island Rayz, defendants' place of business.
(Doc. 36).
Where a non-moving party fails to oppose a motion for summary judgment, then
"summary judgment, if appropriate, shall be entered against" him. Fed. R. Civ. P. 56(e).
However, the Court may not blindly accept the movant's statement of undisputed facts but,
rather, must "satisfy itself that the evidence in the summary judgment record supports this
relief." Hitachi Med. Sys. America, Inc. v. Branch, No. 5:09-cv-1575, 2011 WL 3921718, at *12
(N.D. Ohio Sept. 7, 2011) (citing Vermont Teddy Bear Co., v. 1-900 Beargram Co., 373 F.3d
241, 244 (2d. Cir. 2004)). For the reasons that follow, the Court finds that plaintiffs are entitled
to partial summary judgment.
II. Standard of Review
A motion for summary judgment should be granted if the evidence submitted to the Court
demonstrates that there is no genuine issue as to any material fact, and that the movant is entitled
to judgment as a matter oflaw. Fed. R. Civ. P. 56( c). See Celotex Corp. v. Catrett, 477 U.S.
317,322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242,247 (1986). Under Federal Rule
of Civil Procedure 56(c), a grant of summary judgment is proper if "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue of material fact and the moving party is entitled to judgment as a matter
oflaw." Satterfield v. Tennessee, 295 F.3d 611, 615 (6th Cir. 2002). The Court must evaluate
the evidence, and all inferences drawn therefrom, in the light most favorable to the non-moving
party. Satterfield, 295 F.3d at 615; Matsushita Elec. Industrial Co., Ltd. v. Zenith Radio, 475
2
U.S. 574, 587 (1986); Little Caesar Enterprises, Inc. v. OPPC, LLC, 219 F.3d 547, 551 (6th Cir.
2000).
The trial judge's function is not to weigh the evidence and determine the truth of the
matter, but to determine whether there is a genuine factual issue for trial. Anderson, 477 U.S. at
249-50. The trial court need not search the entire record for material issues of fact, Street v. J. C.
Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir. 1989), but must determine "whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter oflaw." Anderson, 477 U.S. at 251-52.
If, after an appropriate time for discovery, the opposing party is unable to demonstrate a
prima facie case, summary judgment is warranted. Street, 886 F.2d at 1478 (citing Celotex and
Anderson). "Where the record taken as a whole could not lead a rational trier of fact to find for
the non-moving party, there is no 'genuine issue for trial."' Matsushita, 475 U.S. at 587.
III. Undisputed Facts
Plaintiffs move for partial summary judgment on the issue of liability on their claims of
trademark infringement under the Lanham Act. 1 Plaintiffs present the following evidence in
support of their motion for partial summary judgment which, as noted above, has not been
opposed by plaintiffs?
Coach is a world-renowned producer of high quality merchandise. Coach Services, Inc.
has adopted over forty-five (45) trademarks, including the marks at issue in this action, which are
protected by Federal Trademark Registrations (collectively the Coach Registered Trademarks).
Coach has expended substantial time, money and other resources developing, advertising and
otherwise promoting the Coach Registered Trademarks. As a result, members of the consuming
1
Plaintiffs expressly preserve their other claims and their right to elect statutory damages. See Doc. 36,
Ex. 1 at 1.
2
In failing to file a memorandum in opposition to plaintiffs' motion for partial summary judgment,
defendants have failed to offer any facts or evidence opposing plaintiffs' claims. As such, the facts as presented by
3
public readily identify merchandise bearing the Coach Registered Trademarks as being high
quality merchandise. See Doc. 36, Ex.
A,~~
8, 9, 13, 16, Affidavit ofEthan Lau (hereafter "Lau
Affidavit").
The Coach Registered Trademarks, which are distinctive marks used to identify high
quality merchandise, have been used for many years and have not been assigned or licensed to
defendants in this matter. Lau Affidavit at~ 18. By virtue of the sustained use of the marks, the
registrations, the high-quality products and substantial advertising and publicity for the marks,
the Coach Registered Trademarks have acquired secondary meaning so that any product or
advertisement bearing such marks is immediately associated by consumers, the public and the
trade as originating with Coach. Id. at ~~ 15-16.
Ray and Tara McDonald are the owners of Island Rayz tanning salon, which in April of
2011 was located in Proctorville, Ohio, but is now located in South Point, Ohio. (Doc. 31, Ex. B
at 6, Deposition ofTara McDonald (hereafter "T. McDonald Depo."); Doc. 31, Ex. Cat 18,
Deposition of Ray McDonald (hereafter "R. McDonald Depo."). At the time they started the
business, Ray and Tara McDonald jointly decided to sell handbags, and also collaborated
regarding which handbags to purchase for resale at the Island Rayz tanning salon. R. McDonald
Depo. at 45:6-18; 46:12-16. Beginning in approximately 2009, Ray and Tara McDonald started
purchasing handbags at flea markets bearing designer labels for resale at the Island Rayz tanning
salon. R. McDonald Depo. at 37:2-11. This was in response to customer inquiries, specially
asking whether they carried Coach handbags. Id. at 37:12-22. While customers also
occasionally asked for Chanel bags, Coach was the most requested and most popular designer
when it came to customer demand at Island Rayz. Id. at 48:6-17. Defendants chose to sell fabric
handbags bearing Coach Registered Trademarks as opposed to leather bags because they felt
customers wanted items with Cs on the fabric, making the items easily identifiable with the
Coach brand. T. McDonald Depo. at 13: 1-23. In addition to handbags, Defendants also sold
plaintiffs are undisputed.
4
sunglasses and wallets bearing Coach Registered Trademarks. R. McDonald Depo. at 70-72; T.
McDonald Depo. at 31-3 3.
Defendants travelled to St. Augustine, Florida, Milton, West Virginia, and Youngstown,
Ohio to shop at flea markets and purchase these items. R. McDonald Depo. at 49:14-23. They
would pay cash for the handbags, sunglasses, and wallets, and Defendant Ray McDonald would
make the transaction, physically handing the cash to the flea market vendors. !d. at 52:13-20.
Defendants would then sell the items at Island Rayz, charging double the amount they had paid.
!d. at 56:4-17.
Defendants were well aware of the specific marks and traits that made these handbags
resemble Coach handbags. In fact, Defendant Ray McDonald testified that he could easily tell
that a handbag was a Coach replica by looking at the lining and the hardware. !d. at 57:2-18.
Tara McDonald was familiar with and admitted to selling handbags bearing both the Coach
"Signature C" and "Coach Op Art" prints. T. McDonald Depo. at 14-15. The McDonalds
clearly understood that these handbags were not genuine Coach items, as they claim to have told
customers they were "replica purses." R. McDonald Depo. at 58:11-17. Out-of-town customers
would sometimes come from hours away to purchase handbags from Defendants. T. McDonald
Depo. at 52:14-24. Defendant Tara McDonald testified that the Coach replica handbags were
"junky," and that she "hated to even put them out." !d. at 21:15-18. Even though these
handbags were not of the same quality as genuine Coach products, Ms. McDonald testified that
they "would still get [customers] buying them just because of what they had on them ... [T]hey
wanted the Coach Cs." !d. at 22:6-9. When these low-quality handbags would fall apart,
customers would return complaining about the quality. !d. at 22:10-13.
On or about April2011, Coach received a tip regarding the possible sale of counterfeit
and infringing Coach merchandise at Island Rayz tanning salon in Proctorville, Ohio. Lau
Affidavit at ,-r 19. Coach Investigator Robert Hope visited Island Rayz, located at 7390 County
Road 107, Proctorville, Ohio on April9, 2011. (Doc. 36, Ex. D, ,-r 5, Affidavit ofRobert Hope
5
(hereafter "Hope Affidavit")). There he observed a counterfeit Coach handbag in the front
window. Id. Upon entering the building, Mr. Hope asked a sales person named Brittany whether
the business sold Coach Handbags. Id. at ~ 6. Brittany took Mr. Hope into a separate room
filled with counterfeit Coach Handbags. Id. Mr. Hope asked Brittany to recommend a handbag
for a young woman, in response to which Brittany showed Mr. Hope a handbag that she said was
a "popular choice." Id.
at~
8. Mr. Hope paid forty dollars ($40.00) for the handbag, and was not
charged any Ohio Sales Tax. ld.
Coach wallet. Id.
at~
at~
9. Brittany also attempted to sell Mr. Hope a counterfeit
8. Before leaving, Mr. Hope asked the sales woman who owned the
business; she responded that "Tara" was the owner. Id.
at~
10. Mr. Hope was able to confirm
Tara McDonald's affiliation with the business by utilizing the Ohio Secretary of State website.
Id. at ~ 11. Upon further inspection, Coach was able to determine that the purchased handbag
was in fact counterfeit. Lau Affidavit at~ 20; Doc. 36, Ex. E, ~ 4 (Affidavit ofDayanara Perez
(hereafter "Perez Affidavit").
Defendant Ray McDonald verified that an employee Brittany Jeffers was working in the
Defendant's Proctorville, Ohio store on April 9, 2011. R. McDonald Depo. at 17:20-22; 73:7-14.
April 9, 2011 was a Saturday, and it was Defendants' custom to visit flea markets on weekends
and have Brittany Jeffers run the tanning salon and store. Id. at 73:15-24. He also examined
photographs of the purchased handbag and was able to identify a variety of Coach Registered
Trademarks that were present. See I d. at 76-79 and corresponding deposition exhibits 4-7. Mr.
McDonald verified that the receipt provided to the Coach investigator was "one of [his]," and he
verified that no sales tax was charged during the transaction. Id. at pp. 89-91. While Defendants
keep such receipts in the normal course of their business, their receipts do not indicate the
specific item sold, and thus it would be impossible to determine how many handbags bearing the
Coach trademarks were sold by Defendants. Id. at p. 96:19-23.
IV. Analysis
Plaintiffs contend the above undisputed facts demonstrate defendants' liability for
6
trademark infringement and trademark counterfeiting. Plaintiffs therefore assert they are entitled
to summary judgment with respect to defendants' liability for trademark infringement under
Section 32 of the Lanham Act, 15 U.S.C. § 1114(1).
Section 1114 provides in relevant part:
Any person who shall, without consent of the registrant ... use in commerce any
reproduction, counterfeit, copy, or colorable imitation of a registered mark in
connection with the sale, offering for sale, distribution, or advertising of any
goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive ... shall be liable in a civil action by
the registrant for the remedies hereinafter provided.
15 U.S.C. § 1114(1). To prevail on a trademark infringement claim under Section 32 of the
Lanham Act, plaintiffs must demonstrate "that defendant[s'] mark creates a likelihood of
confusion regarding the origin of the goods offered by plaintiff[ s] and defendant[ s]." Innovation
Ventures, LLC v. N VE., Inc., 694 F.3d 723, 731 (6th Cir. 2012). Courts must examine the
following eight factors when determining whether a likelihood of confusion exists:
1.
2.
3.
4.
5.
6.
7.
8.
strength of the senior mark;
relatedness ofthe goods or services;
similarity of the marks;
evidence of actual confusion;
marketing channels used;
likely degree of purchaser care;
the intent of defendant in selecting the mark; and
likelihood of expansion of the product lines.
Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275,280 (6th Cir.
1997). This list is not exhaustive but is simply a guide- "[t]he ultimate question remains
whether relevant customers are likely to believe that the products or services offered by the
parties are affiliated in some way." Homeowners Group, Inc. v. Home Marketing Specialists,
Inc., 931 F.2d 1100, 1107 (6th Cir. 1991).
The Court recognizes that "there is a presumption of a likelihood of confusion" where
counterfeit goods are involved. Microsoft Corp. v. Sellers, 411 F. Supp.2d 913, 919 (E.D. Tenn.
2006) (citing Polo Fashions, Inc. v. Craftex, Inc., 816 F.2d 145, 148 (4th Cir. 1987)). Thus,
7
while the Court would typically engage in an analysis ofthe factors enunciated in Daddy's Junky
Music Stores, 109 F.3d at 280, an extensive discussion of the eight factors is not required in the
instant matter. See Homeowners, 931 F.2d at 1107 (the factors are not applicable in every case).
See also Ford Motor Co. v. Heritage Mgmt. Group, Inc., No. 1:11-CV-92, 2012 WL 5931529, at
*4 (E.D. Tenn. Nov. 27, 2012) (presuming likelihood of confusion where sale of counterfeit
goods were involved and declining to engage in multi-factor analysis). It is undisputed that
defendants were in possession of and sold counterfeit Coach bags at their place of business. See
T. McDonald Depo. at 9-13, 21-22; R. McDonald Depo. at 56-59; Hope Affidavit,~~ 3-12.
Plaintiffs have presented uncontroverted evidence that Mr. Hope requested Coach handbags
while at Island Rayz and was sold a handbag bearing the Coach trademark. Hope Affidavit,
~~
6-9. Further, defendant Tara McDonald testified that plaintiffs continued to sell the counterfeit,
"junky" Coach items because customers specifically requested Coach items and because the
customers "wanted the Coach Cs." T. McDonald Depo. at 9, 21-22. In addition, as the products
sold by plaintiffs were counterfeits, they were likely to cause confusion for consumers. Sellers,
411 F. Supp.2d at 919. Accordingly, plaintiffs have met their burden of showing defendants'
mark creates a likelihood of confusion regarding the origin of the items sold by plaintiffs and
defendants.
In sum, plaintiffs have demonstrated that there is no genuine issue of material fact as to
their claim that defendants are liable under 15 U.S.C. § 1114(1) for trademark infringement and
their partial motion for summary judgment is granted.
Plaintiffs also seek a hearing on damages and to demonstrate defendants' willfulness as it
relates to plaintiffs' state law claims. The Lanham Act provides that a successful plaintiff may
recover actual or statutory damages provided the plaintiff requests statutory damages prior to the
trial court's entry of final judgment. 15 U.S.C. § 1117(c). Here, plaintiffs expressed their intent
to elect statutory judgment in the motion for partial summary judgment. See Doc. 36 at 1. The
amount of statutory damages varies from "$1 ,000 to $200,000 per counterfeit mark" or "if the
8
court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per
counterfeit mark .... " 15 U.S.C. § 1117(c). Plaintiffs have specified that they seek statutory
damages under the Lanham Act "only for marks found on the counterfeit handbag sold by
[d]efendants on April 9, 2011, which by [defendants'] count, totals seven (7) trademarks, or
seven (7) separate infringements." Lau Affidavit,~ 23. Plaintiffs have not requested any
specific damages amount or proffered any evidence in support thereof but, rather, seek a hearing
on the issue. Plaintiffs' request is well-taken and the Court will schedule a damages hearing in
this matter.
V. Conclusion
Plaintiffs' motion for partial summary judgment and request for a hearing on damages
(Doc. 36) are GRANTED. A hearing is hereby set for June 12, 2013 at 9:30 a.m. in
Courtroom 708 ofthe Potter Stewart Courthouse in Cincinnati, Ohio. The Clerk of Court is
DIRECTED to provide a copy of this Order and notice of the hearing to defendants via certified
mail.
IT IS SO ORDERED.
~~
Karen L. Litkovitz
United States Magistrate Judge
9
SENDER: COMPLETE THIS SECTION
• Complete items 1, 2, and 3. Also complete
item 4 if Restricted Delivery is desired.
• Print your name and address on the reverse
so that we can return the card to you.
• Attach this card to the back of the mailpiece,
or on the front if space pennits.
X
B. Received by (Printed Name)
D. Is delivety address different from Item 1?
If YES, enter delivery address below:
1. Article Addressed to:
-r;..r~ K Mcb()t'\4-\d
r<~ T. tv'\ c.- 0o n t;.J tl
4o Te..v""sh:j) ~o~ \KS'
Lh£-.5~ Ul~ 0 f-1 '-{ s b ( t:(
3.
D
D
lceType
ertified Mail
Registered
Insured Mail
D
D
0
Express Mail
Return Receipt for Merchandise
C.O.D.
4. Restricted Delivery? (Extra Fee)
2. Article Number
(T"ransfer from seNice label)
PS Fonn
3811 , February 2004
7011 3500 0001 5345 5475
D
Yes
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?