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Louboutin v. YSL (S.D.N.Y. Oct. 16, 2012) (YSL's Memorandum of Law in Support of Motion to Dismiss Its Counterclaims Voluntarily)

Louboutin v. YSL (S.D.N.Y. Oct. 16, 2012) (YSL's Memorandum of Law in Support of Motion to Dismiss Its Counterclaims Voluntarily)

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Published by: Charles Colman Law, PLLC on Oct 16, 2012
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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - xChristian Louboutin S.A., Christian Louboutin,L.L.C. and Christian Louboutin,Plaintiffs/Counterclaim-Defendants,vs.Yves Saint Laurent America, Inc., Yves SaintLaurent America Holding, Inc. andYves Saint Laurent S.A.S., et al.,Defendants/Counterclaim-Plaintiffs.:::::::- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - xCivil Action Number 11-cv-2381 (VM)ECF Case
DEBEVOISE & PLIMPTON LLPDavid H. Bernstein (dhbernstein@debevoise.com)Jyotin Hamid (jhamid@debevoise.com)Rayna S. Feldman (rsfeldman@debevoise.com)919 Third Avenue New York, New York 10022Telephone 212-909-6696Dated: New York, New York 
Counsel to Defendants and Counterclaim Plaintiffs
October 16, 2012
Yves Saint Laurent America, Inc.,Yves Saint Laurent America Holding, Inc.,and Yves Saint Laurent S.A.S.
Case 1:11-cv-02381-VM Document 69-1 Filed 10/16/12 Page 1 of 7
Yves Saint Laurent America, Inc., Yves Saint Laurent America Holding, Inc. and YvesSaint Laurent S.A.S. (collectively, “YSL”) respectfully submit this memorandum of law insupport of their motion to dismiss voluntarily their counterclaims against Christian LouboutinS.A., Christian Louboutin L.L.C. and Christian Louboutin (collectively, “Louboutin”).
In its September 5, 2012 ruling in this case, the U.S. Court of Appeals for the SecondCircuit directed that final judgment be entered in YSL’s favor on all of Louboutin’s federaltrademark claims. The Court of Appeals ruled conclusively that the YSL monochromatic shoesthat Louboutin challenged in this lawsuit do not infringe any trademark rights of Louboutin.As a result, the only issues remaining to be litigated in this case are YSL’s counterclaimsagainst Louboutin. In light of YSL’s conclusive victory in defeating Louboutin’s claims, and for the reasons detailed herein, YSL believes it appropriate to dismiss its counterclaims voluntarily,thus resolving what remains of this litigation and allowing the parties to close the book on thislitigation and refocus their attention on their respective fashion creations.
Counterclaims Seeking Cancellation.
Four of YSL’s counterclaims seek cancellation of Louboutin’s U.S. Trademark Registration on various bases. This Court had subject matter  jurisdiction over those counterclaims only because Louboutin had asserted claims for trademark infringement against YSL. With Louboutin’s claims now removed as a result of the SecondCircuit ruling, this Court no longer has subject matter jurisdiction with respect to YSL’scounterclaims seeking cancellation. Under controlling law in this Circuit, district courts lack subject matter jurisdiction to adjudicate a claim for cancellation of a federal trademark registration if no other basis for federal jurisdiction is present; instead, such claims must be brought before the Trademark Trials & Appeals Board (the “T.T.A.B.”) of the United States
Case 1:11-cv-02381-VM Document 69-1 Filed 10/16/12 Page 2 of 7
2Patent & Trademark Office. Accordingly, the counterclaims seeking cancellation should bedismissed without prejudice.
Counterclaims for Tortious Interference and Unfair Competition
. YSL’s fifth andsixth counterclaims, for tortious interference and unfair competition, are based on Louboutin’sefforts in early 2011 to pressure certain retailers to return to YSL the red monochromatic shoeschallenged in this case. Although YSL maintains its view that such actions were wrongful, YSLwas able to mitigate some of its damages by re-selling the returned inventory at YSL boutiquesor through e-commerce. In light of that, and given its desire to refocus its energies on its business and creative designs, YSL has decided that these claims are no longer worth pursuing.Accordingly, YSL voluntarily dismisses those counterclaims with prejudice.
Louboutin filed its Complaint and moved for a preliminary injunction on April 7, 2011,challenging four models of red monochromatic shoes sold by YSL, and asserting federaltrademark claims and related state law claims. YSL filed an Answer and Counterclaims on May20, 2011, and an Amended Answer and Counterclaims on June 27, 2011. YSL asserted sixcounterclaims: four seeking cancellation of Louboutin’s federal Trademark Registration onvarious grounds, and the two for tortious interference and unfair competition, respectively, basedon Louboutin’s efforts in early 2011 to pressure certain retailers to return to YSL the redmonochromatic shoes challenged in this case.On July 22, 2011, this Court held a hearing on Louboutin’s motion for a preliminaryinjunction. Preceding the hearing was a period for expedited discovery and full briefing, but both the discovery and the briefing were limited to issues raised by Louboutin’s motion; they didnot include any discovery or briefing on YSL’s counterclaims. To date, no discovery of any kindhas been taken or exchanged on the counterclaims.
Case 1:11-cv-02381-VM Document 69-1 Filed 10/16/12 Page 3 of 7

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