Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

The case involves a dispute between two companies, 1-800 Contacts, Inc. (Plaintiff-Appellant) and JAND, Inc., doing business as Warby Parker (Defendant-Appellee). 1-800 Contacts alleged that Warby Parker used its trademarks in keyword search advertisements, violating the federal Lanham Act and New York State common law. Specifically, 1-800 Contacts claimed that Warby Parker purchased keywords consisting of 1-800 Contacts' trademarks to divert customers searching for 1-800 Contacts to Warby Parker's website. However, 1-800 Contacts did not allege that Warby Parker used its trademarks in any other way beyond purchasing them as keywords.The United States District Court for the Southern District of New York granted Warby Parker's motion for judgment on the pleadings, dismissing the case. The district court applied the Polaroid test to determine the likelihood of consumer confusion and found that although 1-800 Contacts' trademarks were strong and there were indications of bad faith by Warby Parker, these factors were insufficient to establish a likelihood of consumer confusion. The court emphasized that Warby Parker's advertisements and landing pages clearly displayed Warby Parker's own mark, which was substantially different from 1-800 Contacts' marks.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that the mere act of purchasing a competitor's trademarks as keywords does not constitute trademark infringement. It found that 1-800 Contacts failed to plausibly allege any likelihood of consumer confusion under the Polaroid test. The court noted that Warby Parker's advertisements and landing pages did not use 1-800 Contacts' trademarks and were clearly marked with Warby Parker's own branding, making it unlikely that consumers would be confused about the source or affiliation of the advertisements. View "1-800 Contacts, Inc. v. JAND, Inc." on Justia Law

American Girl, LLC, a manufacturer of dolls and related products, sued Zembrka, a Chinese entity operating through websites, for selling counterfeit American Girl products. American Girl alleged that Zembrka's websites sold and shipped counterfeit products to New York, using American Girl's trademarks. The case was filed in the United States District Court for the Southern District of New York.The District Court granted Zembrka's motion to dismiss for lack of personal jurisdiction, emphasizing that American Girl failed to show that Zembrka shipped the counterfeit products to New York. The court concluded that without evidence of shipment, the "transacting business" requirement under New York's long-arm statute, C.P.L.R. § 302(a)(1), was not met. American Girl's motion for reconsideration, which included new evidence of New York customers purchasing counterfeit products, was also denied.The United States Court of Appeals for the Second Circuit reviewed the case. The court found that American Girl had adequately demonstrated that Zembrka transacted business in New York. Evidence showed that Zembrka accepted orders from New York, sent order confirmations, and received payments, which constituted purposeful activity within the state. The court held that actual shipment of goods was not necessary to establish personal jurisdiction under § 302(a)(1). The court also determined that exercising jurisdiction over Zembrka was consistent with due process, given New York's strong interest in protecting its consumers and businesses from counterfeit goods.The Second Circuit reversed the District Court's dismissal and remanded the case for further proceedings. View "American Girl, LLC v. Zembrka" on Justia Law

Plaintiffs Marco Destin, Inc., 1000 Highway 98 East Corp., E&T, Inc., and Panama Surf & Sport, Inc. (collectively, “Marco Destin”) filed a lawsuit against agents of L&L Wings, Inc. (“L&L”), alleging that a 2011 stipulated judgment in a trademark action was obtained through fraud. Marco Destin claimed that L&L had fraudulently procured a trademark registration from the USPTO, which was used to secure the judgment. They sought to vacate the 2011 judgment under Federal Rule of Civil Procedure 60(d)(3) and requested sanctions and damages.The United States District Court for the Southern District of New York dismissed the action for failure to state a claim. The court found that Marco Destin had a reasonable opportunity to uncover the alleged fraud during the initial litigation. Specifically, the court noted that the License Agreement between the parties indicated that other entities might have paramount rights to the "Wings" trademark, suggesting that Marco Destin could have discovered the fraud with due diligence.The United States Court of Appeals for the Second Circuit reviewed the district court’s dismissal for abuse of discretion. The appellate court confirmed that the district court acted within its discretion in declining to vacate the 2011 stipulated judgment. The court emphasized that Marco Destin had a reasonable opportunity to uncover the alleged fraud during the initial litigation and that equitable relief under Rule 60(d)(3) requires a showing of due diligence. The appellate court found no abuse of discretion in the district court’s conclusion that Marco Destin could have discovered the fraud through proper diligence.The Second Circuit affirmed the judgment of the district court, upholding the dismissal of Marco Destin’s claims. View "Marco Destin, Inc. v. Levy" on Justia Law

The case involves a dispute over the use of the term "Medical Special Operations Conference" and its acronym "MSOC" as a trademark. The plaintiff, the City of New York and the FDNY Foundation, and the defendant, Juan Henriquez, both claimed rights to the term. Henriquez, a rescue paramedic with the FDNY, had been organizing conferences under this name since 2011. The FDNY also used the term for its own events. In 2019, Henriquez applied to the U.S. Patent and Trademark Office (P.T.O.) to register the term as a trademark under his name. The P.T.O. initially rejected his application, finding the term merely descriptive of the events Henriquez organized. However, Henriquez successfully amended his application, attesting to his continuous and exclusive use of the mark for the past five years, and the P.T.O. registered the mark under his name.The United States District Court for the Eastern District of New York granted a preliminary injunction in favor of Henriquez, prohibiting the FDNY from using the term for their events. The court found the term to be a suggestive mark, which is entitled to more protection under trademark law than a descriptive mark.On appeal, the United States Court of Appeals for the Second Circuit disagreed with the lower court's classification of the term as a suggestive mark. The appellate court found that the term was descriptive, not suggestive, and therefore merited less protection under trademark law. The court vacated the preliminary injunction and remanded the case for further proceedings. View "City of New York v. Henriquez" on Justia Law

The case in question involves a dispute over the use of the term "red gold" in the marketing of wristwatches. The plaintiff-appellant Solid 21, a luxury jewelry and watch business, owns a trademark in RED GOLD® since 2003. Defendant-appellee Breitling, a luxury watch manufacturer, uses the term “red gold” in its advertisements, product listings, and catalogues. Solid 21 argued that Breitling's use of the term amounted to trademark infringement, claiming it was likely to cause confusion, leading customers to mistakenly believe that Solid 21 was affiliated with Breitling’s products.The United States District Court for the District of Connecticut granted summary judgment for Breitling, finding that the company used the term “red gold” permissibly under the Lanham Act’s fair use defense. Solid 21 appealed this decision, insisting that material issues of fact precluded summary judgment for Breitling.The United States Court of Appeals for the Second Circuit disagreed and affirmed the district court's judgment. The court reasoned that Breitling used the term "red gold" in a descriptive sense, not as a mark, and in good faith. The court also pointed out that Solid 21 failed to provide sufficient evidence to create a genuine issue of material fact as to whether Breitling was acting in bad faith while using the term “red gold.” View "Solid 21, Inc. v. Breitling USA, Inc." on Justia Law

In the case between Vans, Inc., VF Outdoor, LLC (collectively "Vans") and MSCHF Product Studio, Inc. ("MSCHF"), the United States Court of Appeals For the Second Circuit affirmed the district court's decision to grant a temporary restraining order and preliminary injunction against MSCHF. MSCHF had created a sneaker, the Wavy Baby, which appeared to mimic Vans' Old Skool shoe. Vans sued MSCHF for trademark and trade dress infringement. MSCHF argued that its use of Vans' marks was protected by the First Amendment. However, the Court of Appeals applied the recent Supreme Court decision in Jack Daniel's Properties, Inc. v. VIP Products LLC, which held that special First Amendment protections do not apply when trademarks are used as source identifiers. The Court of Appeals concluded that Vans was likely to prevail in arguing that MSCHF's Wavy Baby shoes used Vans' marks and trade dress as source identifiers, and that there was a likelihood of confusion as to the source of the Wavy Baby shoes. The court also affirmed the district court's decisions requiring MSCHF to escrow its revenues from Wavy Baby sales and not requiring a bond determination because MSCHF never requested security. View "Vans, Inc. v. MSCHF Product Studio, Inc." on Justia Law

Defendants Bank of New York Mellon Corporation, LLP and its subsidiary, The Bank of New York Mellon (collectively, “BNYM”), retained Plaintiff as an independent contractor to work on an investment valuation project. Plaintiff developed the so-called Pauwels Model. At various times between 2014 and the end of his working relationship with BNYM in 2018, Plaintiff shared spreadsheets derived from the Pauwels Model with various employees and executives at BNYM. In 2016, BNYM retained Defendants Deloitte LLP, Deloitte Tax LLP, and Deloitte USA LLP (collectively, “Deloitte”) to take over the work that Plaintiff had been performing for BNYM. Plaintiff alleged that Deloitte used the spreadsheets to reverse engineer the Pauwels Model and was using the model to conduct the services it provided to BNYM. Plaintiff brought suit against BNYM and Deloitte, alleging, among other claims, that the Pauwels Model embodied a trade secret that they misappropriated.   The Second Circuit reversed and remanded the district court’s judgment insofar as it dismissed Plaintiff’s unjust enrichment claim. The court affirmed the remainder of the judgment. The court explained that misappropriation is not an element of a claim for unjust enrichment under New York law. Therefore, a plaintiff’s claim for unjust enrichment does not necessarily rise or fall with a claim of trade secret misappropriation. The court explained that because Plaintiff’s theory of liability is distinct from those underpinning Plaintiff’s claim for trade secret misappropriation, his claim for unjust enrichment should not have been dismissed as duplicative of his claim for trade secret misappropriation. View "Pauwels v. Deloitte LLP" on Justia Law

In a trademark dispute under the Lanham Act, 15 U.S.C. sections 1114, 1125(a), and New York’s law of trademark and unfair competition, PepsiCo, Inc., the Defendant, which marketed a canned energy drink under the mark “MTN DEW RISE ENERGY,” appealed from a preliminary injunction imposed on it by the district court at the instance of the Plaintiff, RiseandShine Corporation, d/b/a Rise Brewing (“Rise Brewing”), which sells nitro-brewed canned coffee (and also canned tea) under the name RISE. It is undisputed that Plaintiff began using the RISE mark prior to Defendant’s use of its mark. The district court concluded that  Defendant’s conduct in using RISE caused a likelihood of confusion and that  Plaintiff was likely to succeed on the merits.   The Second Circuit vacated the preliminary injunction, finding that the grant of a preliminary injunction was premised on two significant errors. The court wrote that the district court granted Plaintiff a preliminary injunction based in part on the conclusion that Plaintiff was likely to succeed on the merits. This rested in substantial part on the court’s conclusion that Plaintiff’s mark was strong—both in inherent and acquired strength—as well as its determination that the two products were “confusingly similar.” To the extent that Defendant’s use of its marks caused any likelihood of confusion, this was because Plaintiff chose a weak mark in a crowded field. For this reason, the balance of hardships did not favor Plaintiff. Plaintiff did not demonstrate a likelihood of success on the merits. View "RiseandShine Corporation v. PepsiCo, Inc." on Justia Law

Hamilton filed suit against Vortic and its founder for selling wristwatches that featured restored antique pocket watch parts with Hamilton's trademark. The district court entered judgment in favor of defendants, finding that Vortic's use of the mark was not likely to cause consumer confusion.The Second Circuit confirmed that a plaintiff in a trademark infringement suit bears the burden of proving that a defendant's use of its mark is likely to mislead consumers, even when Champion Spark Plug Co. v. Sanders, 331 U.S. 125 (1947), is implicated, and that no particular order of analysis is required, provided that the district court considers all appropriate factors in light of the circumstances presented. The court affirmed the district court's judgment in this case, concluding that the district court properly placed the burden of proving trademark infringement on Hamilton, and correctly analyzed the relevant considerations under Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir. 1961), and Champion. Furthermore, the district court correctly applied Champion and Polaroid to these factual findings to conclude that there was no likelihood of consumer confusion. Finally, the district court properly concluded that defendants were entitled to judgment on the remaining claims. View "Hamilton International Ltd. v. Vortic LLC" on Justia Law

The Second Circuit reversed the district court's grant of final judgment for Mixpac on its claims of unfair competition, infringement of common law trademarks, and its claims under the Trademark Act of 1946 (Lanham Act) for trademark counterfeiting, infringement of registered marks, and false designation of origin. Mixpac and defendants are competitors in the U.S. market for mixing tips used by dentists to create impressions of teeth for dental procedures, such as crowns.The court disagreed with the district court's holding that Mixpac's trade dress—its use of yellow, teal, blue, pink, purple, brown, and white on mixing tips—is not functional. Instead, the court held that the use of these colors on mixing tips is functional, as the colors signify diameter and enable users to match a cartridge to the appropriate mixing tip. Accordingly, the court remanded for entry of final judgment in favor of defendants on the unfair competition, trademark infringement, trademark counterfeiting, and false designation of origin claims. The court declined to address defendants' counter claims and to address in the first instance Mixpac's civil contempt claim. View "Sulzer Mixpac AG v. A&N Trading Co., Ltd." on Justia Law