Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
Fendi v. Bulrington Coat Factory No Longer Blushing

Fendi v. Bulrington Coat Factory No Longer Blushing

Ratings: (0)|Views: 87 |Likes:
Published by Fame Appeal
No longer Bluffing

Fendi has been awarded triple damages against Burlington Coat Factory for breach of a 23 year old injunction prohibiting Burlington from selling counterfeit Fendi goods. This ruling puts retailers on notice that they need to take an active role in investigating the source of their goods. They can no longer avoid liability for selling counterfeits by failing to verify the origin and authenticity of the goods received from vendors or they may face a claim of willful blindness.

The court found a 1987 injunction should have put Burlington on notice, however it did not “implement any mechanisms to ensure compliance with the order”. Even more alarming was Burlington’s continued sale of the goods after receiving Fendi’s cease and desist letter in 2004 (Burlington only removed the Fendi goods after Fendi initiated the action in 2006). Burlington’s response for their inaction; they believed the “letter was a bluff in an attempt to scare Burlington into taking Fendi merchandise off its shelves.”
No longer Bluffing

Fendi has been awarded triple damages against Burlington Coat Factory for breach of a 23 year old injunction prohibiting Burlington from selling counterfeit Fendi goods. This ruling puts retailers on notice that they need to take an active role in investigating the source of their goods. They can no longer avoid liability for selling counterfeits by failing to verify the origin and authenticity of the goods received from vendors or they may face a claim of willful blindness.

The court found a 1987 injunction should have put Burlington on notice, however it did not “implement any mechanisms to ensure compliance with the order”. Even more alarming was Burlington’s continued sale of the goods after receiving Fendi’s cease and desist letter in 2004 (Burlington only removed the Fendi goods after Fendi initiated the action in 2006). Burlington’s response for their inaction; they believed the “letter was a bluff in an attempt to scare Burlington into taking Fendi merchandise off its shelves.”

More info:

Categories:Types, Business/Law
Published by: Fame Appeal on Oct 25, 2010
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as RTF, PDF, TXT or read online from Scribd
See more
See less

12/05/2013

pdf

text

original

 
 WWW.FAMEAPPEAL.COM  WWW.FAMEAPPEAL.COM 
689 F. SUPP. 2D 585
FENDI ADELE S.R.L., FENDI S.R.L., and FENDI NORTH AMERICA, Plaintiffs,v. BURLINGTON COAT FACTORY WAREHOUSE CORP. et al., Defendants.No. 06 Civ. 85 (LBS)UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OFNEW YORK 
689 F. Supp. 2d 585
;
2010 U.S. Dist.
March 22, 2010, DecidedMarch 23, 2010, Filed
JUDGES:
Leonard B. Sand, United StatesDistrict Judge.
OPINION BY:
Leonard B. Sand
OPINION
[*608]
 MEMORANDUM AND ORDER 
 SAND, J.On February 8, 2010, this Courtgranted summary judgment in favor ofPlaintiffs Fendi Adele S.R.L., FendiS.R.L., and Fendi North America(collectively known as "Fendi"),finding Defendants Burlington CoatFactory Warehouse Corporation andCohoes Fashion, Inc., a wholly-ownedsubsidiary of Burlington Coat Factory,(collectively known as "Burlington")liable for trademark counterfeiting,trademark dilution, and common lawunfair competition. [**3]
Fendi AdeleS.R.L, v. Burlington Coat Factory, No.06 Civ. 85 (LBS), 689 F. Supp. 2d 585,2010 U.S. Dist. LEXIS 10628, 2010 WL431509, at * 10 (S.D.N.Y. Feb. 8,2010)
("February 2010 order"). Weawarded treble damages for thecounterfeit goods sold after the April2004 cease and desist letter andreferred the matter to the MagistrateJudge for a calculation of damages.Now before this Court is Fendi'sMotion for Partial Reconsideration.
1
Fendi seeks to clarify the damagesawarded, if any, with regard tocounterfeit goods sold prior to theApril 2004 letter. If the sale ofFendi-branded goods prior to the ceaseand desist letter is not found to bewillful, the issue remains as towhether the bad faith requirementstill exists. The courts in thisDistrict are currently divided as towhether a finding of bad faith isstill required in order to awardtreble damages in light of theTrademark Amendments Act of 1999. Inour February 2010 order, we found theApril 2004 letter establishedwillfulness and did not reach thequestion of whether the bad faithrequirement survives the 1999Amendments.
Fendi, 2010 U.S. Dist.LEXIS 10628, 2010 WL 431509, at * 11
.Fendi urges reconsideration of theissue of willfulness for the periodprior to the April 2004 letter, or, ifwillfulness [**4] is not found, adetermination as to whether the badfaith requirement survives the 1999Amendments.1 For the purposes of thismotion, we assume familiaritywith the facts.Upon reconsideration, we find thatBurlington willfully infringed for theentire period. The Court's February
 
 WWW.FAMEAPPEAL.COM 
2010 order is modified to award Fenditreble damages for all of thecounterfeit goods at issue.
I. Standard of Review
 [HN1] The standard for willfulnessis whether the defendant had knowledgethat his or her conduct representedinfringement or recklessly disregardedthe possibility.
Kepner-Tregoe, Inc.v. Vroom, 186 F.3d 283, 288 (2d Cir.1999)
;
see Koon Chun Hing Kee Soy &Sauce Factory, Ltd. v. Star Mark Mgmt,No 04 Civ. 2293 (JFB), 2007 U.S. Dist.LEXIS 1404, 2007 WL 74304, at * 11(E.D.N.Y. Jan. 8, 2007)
(applying thewillfulness standard in
Kepner-Tregoe
to claims brought under the LanhamAct);
Nike, Inc. v. Top Brand Co., No.00 Civ. 8179 (KMW), 2005 U.S. Dist.LEXIS 42374, 2005 WL 1654859, at * 6 (S.D.N.Y. July 13, 2005)
(same). Whilecaution must be exercised in grantingsummary judgment when state of mind isan issue, the summary judgment rule"would be rendered sterile" if themere existence of an issue as to stateof mind would automatically defeat anotherwise [**5] valid motion.
NoraBeverages, Inc. v. Perrier Group of America, Inc., 269 F.3d 114, 125 (2d Cir. 2001)
. Where the defendant offersno probative evidence raising agenuine issue of material factregarding willfulness, summaryjudgment is appropriate. [*609]
Tanning Research Lab., Inc. v.Worldwide Import & Export Corp., 803F. Supp. 606, 610 (E.D.N.Y. 1992)
.
II. Willfulness of Pre-2004 Sales
 [HN2] "Willful infringement may beattributed to the defendant's actionswhere he had knowledge that hisconduct constituted infringement orwhere he showed a reckless disregardfor the owner's rights."
Johnson &Johnson Consumer Companies, Inc. v.Aini, 540 F. Supp. 2d 374, 39(E.D.N.Y. 2008)
;
see also CartieInt'l B.V. v. Ben-Menachem No. 06 Civ.3917 (RWS), 2007 U.S. Dist. LEXIS95366, 2008 WL 64005, at * 14(S.D.N.Y. Jan. 3, 2008)
(Conduct canbe found to be willful where thedefendant "recklessly disregarded thepossibility" that his or her conductconstituted infringement.). Courtshave repeatedly found willfulnesswhere a defendant receives a cease anddesist letter but continues theinfringing conduct.
See Fendi, 2010U.S. Dist. LEXIS 10628, 2010 WL431509, at * 10
(collecting cases).Courts have also found willfulinfringement where the infringingparty was [**6] found liable and thendid not alter or cease the infringingactivity.
See Burberry Ltd. v. EuroModa, No. 08 Civ. 5781 (CM), 2009 U.S.Dist. LEXIS 113407, 2009 WL 4432678,at * 3 (S.D.N.Y. Dec. 4, 2009)
(finding ample evidence of willfulnesswhere a prior settlement putdefendants on notice of the infringingactivity, yet defendants persisted inthe same conduct);
Kepner-Tregoe,Inc., 186 F.3d at 288
(findingcopyright infringement was willfulwhere the defendant "chose to ignorethe injunction [issued by a Texasdistrict court and upheld by the FifthCircuit] and continued to use the MPOprogram" that had been found to beinfringing);
Viacom Int'l Inc. v.Fanzine Int'l, Inc., No. 98 Civ. 7448(RCC), 2001 U.S. Dist. LEXIS 11925,2001 WL 930248, at * 4 (S.D.N.Y. Aug.16, 2001)
(where the defendant hadbeen sued at least two times in theprevious year, with one suit resultingin a default judgment against thedefendant, the court found that thedefendant's subsequent "strikinglysimilar conduct" suggests that thedefendant "knew or should have knownthat its actions constituted[copyright] infringement.").When Burlington took no action tocomply with the 1987 Injunction andbegan violating the injunction asearly as 1993,
2
Burlington showed[**7] a reckless disregard for Fendi'strademark rights.
Johnson & Johnson,540 F. Supp. 2d at 396 
. The 1987Injunction, like a cease and desistletter or a finding of liability, putBurlington on notice that its behaviorwas potentially infringing on Fendi'strademark. In fact, the injunction waseven more specific than a cease and
 
 WWW.FAMEAPPEAL.COM 
desist letter or a finding ofliability because it mandated aspecific course of action to protectagainst future infringement--Burlington was not to sell
any 
Fendi-branded merchandise without firstobtaining permission from Fendi.Burlington did not implement anycontrol mechanisms to ensurecompliance with the injunction. (Pl.'s56.1 P 16.) Burlington's in-housecounsel, Stacy Haigney, who waspresent in court when the 1987Injunction was entered, admitted thathe was not aware of a single piece ofwriting concerning any steps that thecompany took to comply with theinjunction.
Id 
.2 Burlington's records havebeen a persistent obstacle inthis litigation. At the time ofour 2007 opinion, we believedBurlington's first sale of Fendigoods was in 2002. Subsequentdiscovery revealed thatBurlington began selling Fendi-branded goods no later than 1993.Burlington [**8] has made norecords available for the sixyears immediately after theinjunction was entered.
Fendi,2010 U.S. Dist. LEXIS 10628, 2010WL 431509, at * 24
. As MagistrateJudge Dolinger noted in hisReport and Recommendation, "whileplaintiffs know a sale was madeas early as 1993, it is possiblethat sales could have occurredeven earlier, but impossible toconfirm or refute thathypothesis."
Id 
.[*610] Burlington did not evencomply with its own trademarkprotection policies in the yearsfollowing the injunction. Burlington'spolicies required that buyers (1)speak with Haigney prior to purchasingtrademarked merchandise from third-party vendors, (Def. Response to 56.1P 254; Genecin Dec. Ex. 37 ("HaigneyDep.") at 156:20-157:23); and (2)obtain authentication documents forpurchases from third-party vendors.(Pl. 's 56.1 P 266.) Burlingtonpurchased Fendi-branded goods from theVendors as early as 2000. Haigneytestified that the first time a buyerapproached him regarding purchasingFendi-branded goods from a third-partyvendor was not until 2003. (HaigneyDep. at 113:3-21.) No buyer eversought approval from Haigney for anypurchase of Fendi-branded goods fromAshley Reed. (Pl.'s 56.1 P 261.)Burlington did not obtain [**9]authentication documents for any ofits purchases from the Vendors. (Pl.'s56.P 268.) Burlington was aware of therisk associated with buyingtrademarked goods from third-partyvendors, yet it did not buy fromauthorized distributers, (Genecin Dec.Ex. 38 ("Goldstein Dep.") at 143:21-144:9; Pl.'s 56.1 P 255), or verifythe authenticity of the goodspurchased from third-party vendors,(Goldstein Dep. at 143:3-20).Burlington has failed to offer anyevidence raising a genuine issue ofmaterial fact regarding its willfullyblind infringement.
See Tanning Research, 803 F. Supp, at 610
("[D]efendants have offered noprobative evidence raising a genuineissue of material fact regarding theirwillfully blind violation.").Burlington concedes that it took noaction to implement procedures inorder to ensure compliance with the1987 Injunction, and it has offered noevidence to demonstrate that itcomplied with its own trademarkprotection policies. Burlington arguesthat it forgot about the injunction;however, whether Burlington forgotabout the injunction is irrelevant.The crucial time for the purpose offinding willfulness is immediatelyafter the 1987 Injunction was entered.At that moment, [**10] Burlington wason notice that its conduct potentiallyinfringed on Fendi's trademark, and indoing nothing, Burlington demonstrateda reckless disregard for theinjunction and for its purpose--toprevent Burlington from infringing onFendi's trademark in the future.
SeeBurberry Ltd v. Euro Moda, 2009 WL4432678, at * 3
("In light of theprior June 30, 2005 settlement

Activity (2)

You've already reviewed this. Edit your review.
1 thousand reads
1 hundred reads

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->