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Rimowa Distribution, Inc. v. Travelers Club Luggage, Inc.

United States District Court, D. Massachusetts

November 8, 2016

RIMOWA DISTRIBUTION, INC.
v.
TRAVELERS CLUB LUGGAGE, INC.

          MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

          Richard G. Stearns UNITED STATES DISTRICT JUDGE.

         Rimowa Distribution, Inc., [1] a purveyor of luxury luggage, asserts that Travelers Club Luggage, Inc. (TCL), markets competing suitcases that misappropriate Rimowa's protected "distinctive pattern of ridges and grooves." Am. Compl. ¶ 1. Rimowa alleges trademark infringement and false designation of origin under the Lanham Act (Count I); trade dress infringement under the Lanham Act (Count II); common-law trademark and trade dress infringement (Count III); trademark dilution (Count IV); counterfeiting (Count V); and common-law unfair competition (Count VI). Discovery having been completed, TCL now moves for summary judgment of no liability. Rimowa, for its part, seeks brevis judgment on TCL's fraudulent procurement defense and counterclaim.

         BACKGROUND

         Rimowa's German corporate parent, Rimowa GMBH, is the record owner of Trademark Registration No. 2, 583, 912 (the '912 registration) on the Supplemental Register, and Trademark Registrations Nos. 3, 949, 886 (the '886 registration); 4, 548, 851 (the '851 registration); and 4, 586, 888 (the '888 registration) on the Principal Register.[2] The '912 registration was issued on June 18, 2002, and depicts "a piece of luggage having parallel space ribs." The '886 registration was issued on April 26, 2011, and depicts "horizontal bands that run across and around the owner's luggage products." The '851 registration was issued on June 10, 2014, and depicts "a three-dimensional design feature of the [luggage] goods consisting of parallel ridges and grooves that uniformly cover the surface of the goods." The '888 registration was issued on August 19, 2014, and depicts "a 3D pattern of strait [sic] ridges and grooves that appear uniformly over the surface of the applicant's [luggage] goods." The registrations state that the marks have been in use since 1950, and were first used in commerce in the United States in 1985. The claimed marks of the '851 and the '888 are reproduced below.

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         Rimowa asserts infringement of the four registrations as well as its "distinctive trade dress, consisting not only of the pattern of ridges and grooves, but also of the overall appearance of its luggage, including the placement and appearance of rollers and roller housing, handles, and trolley bars, locks, and corner protectors." Rimowa's Response to TCL's Statement of Material Facts, Dkt. # 102 ¶ 1. Rimowa identifies as infringing products TCL's Chicago, Jet Set, Nova, Bayhead, Orbit, Getaway, Atlas, Maze, Cerulean, Rio, and Sequoia Collections, the Lulu Castagnette line of luggage, and the lines designated with the serial numbers HS-27803, HS-27903, and HS-28103. Am. Compl. ¶ 1. Exemplars of Rimowa's luggage and TCL's accused Chicago and Orbit Collections are reproduced below.

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         DISCUSSION

         Summary judgment is appropriate when "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 'genuine' issue is one that could be resolved in favor of either party, and a 'material fact' is one that has the potential of affecting the outcome of the case." Calero-Cerezo v. U.S. Dep't of Justice, 355 F.3d 6, 19 (1st Cir. 2004), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-250 (1986). The moving party bears the burden of establishing that there is no genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). "The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255.

         Standing

         TCL asserts that Rimowa lacks standing to bring the infringement claims because it is not an exclusive licensee of the asserted marks. Although the Lanham Act grants to the "registrant" the right to recover for trademark infringement, 15 U.S.C. § 1114, the First Circuit has interpreted the statute liberally to permit recovery by registrants, their assignees, and exclusive licensees. Quabaug Rubber Co. v. Fabiano Shoe Co., 567 F.2d 154, 158 (1st Cir. 1977). Rimowa became the exclusive licensee of the asserted marks in the United States by virtue of a December 2014 compact with Rimowa GMBH. Pursuant to the agreement, Rimowa acquired and possesses undivided rights to the marks within its grant of territory, including the right to sublicense and enforce the marks as it deems fit.

Licensor hereby grants to Licensee an exclusive license... to use the Intellectual Property including any and all common law rights in the Territory in the manner specified in this License.... Licensor further agrees not to grant licenses to other parties to use the Intellectual Property within the Territory, Licensee shall have the right to grant sublicenses in the Territory.
. . . .
Licensee shall ... in its sole and absolute discretion and at its own expense challenge unauthorized use of [the Intellectual Property] or institute any proceeding deemed in its discretion desirable in order to protect the Intellectual Property.

Rimowa License (Dkt. # 83-8) ¶¶1, 5.1.

         TCL challenges the exclusivity of Rimowa's license by pointing to a 2009 license agreement between Rimowa GMBH and Rimowa North America, Inc. (Rimowa NA), a Canadian subsidiary of Rimowa GMBH. The agreement bestows on Rimowa NA "a non-exclusive license" for "all expertise and all necessary patents and proprietary rights ... to manufacture polycarbonate [and aluminum] suitcase series of the brand RIMOWA, " including for "distribution and sales ... in the USA." Rimowa NA License (Dkt. # 83-9) §§ 1.1, 2.1; Addendum. The Rimowa NA License, by its own terms, will expire on December 31, 2016. Id. at § 5.1. Thomas Nelson, Vice President for Rimowa and Rimowa NA, explained that the Rimowa NA License was terminated prior to the Rimowa License (and that Rimowa NA is now sublicensed by Rimowa with respect to its United States sales). Nelson Aff. (Dkt. # 96) ¶¶ 3-4, 11-12. TCL argues that the Rimowa NA License requires that any alteration of its terms be made in writing, § 7.1, and because Rimowa has not produced written confirmation of the termination of the Rimowa NA License, it follows that Rimowa is not the exclusive licensee of the marks in the United States.

         This dispute, concerning the internal reorganization of the licensing scheme among the Rimowa family of companies, rings more of sounding brass and tinkling cymbals than of any tune of pragmatic consequence.[3] The court need not make a determination whether Rimowa has standing to act as a sole plaintiff. In the Rimowa License, Rimowa GMBH committed itself to "assist Licensee in the protection, whether by judicial means or otherwise, of the Intellectual Property, " § 5.1, which is what this litigation is all about. Because the deficiency is one of form and not of substance, the court will permit Rimowa to amend its Complaint within fourteen days of the date of this opinion to add Rimowa GMBH as a co-plaintiff.

         TCL also contends that because only an "owner" may seek to enjoin the dilution of a "famous mark" under the Lanham Act, 15 U.S.C. § 1125(c), as a licensee, Rimowa has no standing to assert such a claim. Although a few district courts have agreed with TCL, see, e.g., Prince of Peace Enters., Inc. v. Top Quality Food Mkt., LLC, 760 F.Supp.2d 384, 393 (S.D.N.Y. 2011), it is the view of this court that the counter-rationale set out in Quabaug Rubber is the more persuasive. In Quabaug Rubber, the Court, by analogizing to patents, held that an exclusive licensee may exercise the rights of an owner when it holds the monopoly on a mark within a given territory. 567 F.2d at 158-159. Because it holds the right to exclude others, grant sublicenses, and enforce the marks in United States, Rimowa stands in the shoes of the "owner" for all intents and purposes. Moreover, any lingering concerns over the niceties of ownership will be mooted by the joinder of Rimowa GMBH.

         Rimowa's Infringement Claims

         TCL maintains that Rimowa cannot prevail on its infringement claims because Rimowa has no evidence to support a finding of likelihood of confusion between the companies' competing lines of suitcases. Likelihood of confusion is "an essential element of a claim of trademark infringement, whether asserted under Massachusetts or federal law." Pignons SA. de Mecanique de Precision v. Polaroid Corp., 657 F.2d 482, 486-487 (1st Cir. 1981). When assessing the likelihood of confusion, courts typically consider the so-called Pignons factors: "the similarity of the marks; the similarity of the goods; the relationship between the parties' channels of trade; the relationship between the parties' advertising; the classes of prospective purchasers; evidence of actual confusion; the defendants' intent in adopting its mark; and the strength of the plaintiff's mark." Id. at 487. Of the Pignons factors, "[e]vidence of actual confusion is often considered the most persuasive evidence of likelihood of confusion because past confusion is frequently a strong indicator of future confusion." Beacon Mut. Ins. v. OneBeacon Ins. Grp., 376 F.3d 8, 18 (1st. Cir. 2004). On the flip side, "an absence of actual confusion, or a negligible amount of it, between two products after a long period of coexistence on the market is highly probative in showing that little likelihood of confusion exists." Aktiebolaget Electrolux v. Armatron Int'l, Inc., 999 F.2d 1, 4 (1st Cir. 1993).

         The court agrees with TCL that Rimowa has failed to identify admissible evidence of actual confusion between Rimowa's luggage and the accused products. Although Rimowa asserts that it has been "contacted by consumers confused by [] look-alike luggage which had not been manufactured by Rimowa, including consumers 'returning' to Rimowa lookalike luggage . . . manufactured by someone other than Rimowa, " Rimowa Opp'n at 3, nothing in the record indicates that the "returned look-alikes" were manufactured by TCL.

         Evidence of actual confusion, however, is not a precondition to establishing a likelihood of confusion. Bose Corp. v. Ejaz, 732 F.3d 17, 27 (1st Cir. 2013), citing Societe Des Produits Nestle, SA. v. Casa Helvetia, Inc., 982 F.2d 633, 640 (1st Cir. 1992). The absence of actual confusion evidence is probative only where the competing products have durably coexisted in the same marketplace. The First Circuit has observed that

a lack of evidence of actual confusion weighs against a finding of likely confusion when competing marks have competed in the same market for six years, [Aktiebolaget, 999 F.2d at 4], four years, Pignons, 657 F.2d at 490, or as little as three and a half years, Keebler ...

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