`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`-------------------------------------------------------x
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`SARA DESIGNS, INC.,
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`Plaintiff,
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`-v-
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`A CLASSIC TIME WATCH CO. INC., and
`NEW YORK AND COMPANY, INC.,
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`Defendants.
`
`-------------------------------------------------------x
`
`No. 16CV03638-LTS
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`MEMORANDUM ORDER AND OPINION
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`Plaintiff Sara Designs, Inc. (“Sara Designs”) brings suit against A Classic Time
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`Watch Co. Inc. (“A Classic Time Watch Co.”) and New York and Company, Inc. (“NY & Co.,”
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`together with A Classic Time Watch Co., the “Defendants”), asserting claims for: (1) federal
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`copyright infringement pursuant to Federal Copyright Act of 1976, 17 U.S.C. § 101, et seq.
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`(“Copyright Act”); (2) federal trade dress infringement pursuant to the Federal Trademark Act of
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`1946, 15 U.S.C. § 1051, et seq. (“Lanham Act”), and 15 U.S.C. § 1125(a); (3) state trademark
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`infringement and dilution under New York General Business Law § 360; (4) unfair trade
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`practices under New York common law; and (5) deceptive practices and false advertising under
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`New York General Business Law §§ 349 and 350.
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`The Court has jurisdiction of this action pursuant to 28 U.S.C. §§ 1331 and 1367.
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`Defendants have moved to dismiss the Complaint pursuant to Federal Rule of
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`Civil Procedure 12(b)(6). Plaintiff has cross-moved for a preliminary injunction to prohibit
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`Defendants from manufacturing, importing, and selling via wholesale or retail channels, the
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`allegedly infringing watch designs at issue. For the following reasons, Defendants’ motion is
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`granted and Plaintiff’s motion for a preliminary injunction is denied.
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`BACKGROUND
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`The following facts are taken from the Complaint, and assumed to be true for the
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`purposes of this motion practice.
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`Plaintiff is a famous and distinguished jewelry designer, and sells its designs,
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`including a highly successful series of wrap watches, through wholesale orders placed at trade
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`shows, directly to consumers, and through high-end department stores, fashion boutiques and
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`online retailers around the world. (Compl. ¶ 6.) In 2009, Plaintiff created several styles of wrap
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`watches using gradient chains, leather strands, adjustable links that include a lobster claw closure
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`connected to the gradient chains with a ring, and an extension chain with a Sara Designs leaf-
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`shaped logo connected to the watch. (Id. ¶¶ 10-12.)
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`Plaintiff has promoted its goods at trade shows since before 2012 and has
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`participated in the “ENK” trade show since 2012. (Id. ¶¶ 15-16.) Plaintiff’s products, including
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`wrap style watches, have been carried by internet retailers, as well as at physical stores. (Id. ¶¶
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`17-22.) Plaintiff participated in two trade shows in 2014. (Id. ¶ 23.) A representative from NY
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`& Co. visited Plaintiff’s booth to ask whether Plaintiff would lower prices or produce their
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`product with lower-end materials under the NY & Co. brand. (Id. ¶ 24.) Plaintiff’s
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`representative at the trade show declined to work with NY & Co. at the time. (Id. ¶ 25.)
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`Between 2014 and 2015, Plaintiff was made aware of Defendants’ watches that allegedly copied
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`Plaintiff’s W03, W04, W07, W07C, and the W07L-M Rosegold/RG watches. (Id. ¶¶ 26-29.)
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`NY & Co. contracted with A Classic Time for manufacture of the watches. (Id. ¶¶ 32-34.)
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`Plaintiff’s Complaint, filed in May 2016, was accompanied by several exhibits,
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`including the registration for the “SARA DESIGNS” trademark (Ex. A), certificates of copyright
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`registration for several watches (Ex. B), and numerous images of what appear to be internet
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`screenshots of various iterations of Plaintiff’s watches and Defendants’ allegedly infringing
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`watches. (Exs. C-E.) Among the certificates of registration submitted are certificates for:
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`Registration Number VA 1-876-624 for a work titled “W04 All Chain Wrap Watch” completed
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`in 2009 with effective date of registration March 15, 2013; Registration Number VA 1-876-642
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`for a work titled “W07 Leather and Chain Wrap Watch” completed in 2009 with effective date
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`of registration March 13, 2013; Registration Number VA 1-876-647 for work titled “W06
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`Second Strand Studded Wrap Watch” completed in 2009 with effective dated of registration
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`March 21, 2013. (See id.) Each of the submitted certificates consists of a single page of text,
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`and none is accompanied by any corresponding images of the work it purports to cover nor any
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`specific descriptions of the work, other than the title of the work as referenced above. The
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`internet images of the allegedly infringed watches are not specifically labeled or alleged to
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`correspond to any particular registration number.
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`On December 12, 2016, the Court issued an Order, directing Plaintiff to file a
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`supplemental submission, “clarifying the specific copyrighted watches it claims to have been
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`infringed and any corresponding allegedly infringing watches . . . and documentation clarifying
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`the scope of the copyright application and grant covering the allegedly infringed watches.”
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`(Docket entry no. 32.) Plaintiff filed a Supplemental Declaration (docket entry no. 33), which
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`contained images for the following watch titles: “W07 RoseGold.RG,” “W07L SilverSnake,”
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`“W07 Gold.G,” “W03/W04 sm dial gold,” “W03/W04 sm dial silver,” “W07C,” and “W07
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`BrnSnake.” The Supplemental Declaration asserted that “W07 RoseGold.RG,” “W07L
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`SilverSnake,” “W07 Gold.G,” and “W07 BrnSnake,” are all covered by Registration Number VA
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`1-876-642 for the “W07 Leather and Chain Wrap Watch.” It also asserted that “W07C” was
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`covered by Registration Number VA 1-876-624 for the “W04 All Chain Wrap Watch.” Plaintiff,
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`however, did not provide any further information, pertaining to the application for the
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`certificates of registration or otherwise, that would demonstrate that the certificates of
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`registration corresponded to the images of the various watches submitted with the Complaint.
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`On February 7, 2017, the Court held an oral argument on the motion to dismiss
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`and the motion for a preliminary injunction, where, among other things, Plaintiff was given a
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`further opportunity to explain precisely which watches it contends are covered by the certificates
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`of registration submitted. Plaintiff’s counsel proffered that Plaintiff was in possession of
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`additional materials that would support its position that the certificates of registration cover the
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`allegedly infringed watches, but acknowledged that Plaintiff’s counsel had neglected to include
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`such materials in Plaintiff’s response to the Court’s December 12, 2016, Order. Plaintiff’s
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`counsel made an oral application for leave to amend the Complaint, which the Court took under
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`advisement.
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`DISCUSSION
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` To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of
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`Procedure, a complaint “must contain sufficient factual matter, accepted as true, to state a claim
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`to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal
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`quotation marks and citations omitted). This requirement is satisfied when the factual content in
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`the complaint “allows the court to draw the reasonable inference that the defendant is liable for
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`the misconduct alleged.” Id. (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007)).
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`A complaint that contains only “naked assertions” or “a formulaic recitation of the elements of a
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`cause of action” does not suffice. Twombly, 550 U.S. at 555. In making its Rule 12(b)(6)
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`determinations, the court “may consider any written instrument attached to the complaint,
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`statements or documents incorporated into the complaint by reference . . . and documents
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`possessed by or known to the plaintiff and upon which [he] relied in bringing the suit.” ATSI
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`Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007). In deciding a Rule 12(b)(6)
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`motion, a court assumes the truth of the facts asserted in the complaint and draws all reasonable
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`inferences from those facts in favor of the plaintiff. See Harris v. Mills, 572 F.3d 66, 71 (2d Cir.
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`2009).
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`1.
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`Federal Copyright Claim
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`Defendants move to dismiss Plaintiff’s federal copyright claim, arguing that
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`Plaintiff’s copyright registrations are invalid because wrap watches as a concept are not
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`protectable by copyright law, that there is no substantial similarity between the Plaintiff’s
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`watches and those sold by Defendants, and that Plaintiff cannot claim that a single certificate of
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`registration covers multiple styles of watches.
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`Under the Copyright Act, “no civil action for infringement of the copyright in any
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`United States work shall be instituted until preregistration or registration of the copyright claim
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`has been made in accordance with this title.” 17 U.S.C. § 411(a). Proper registration is a
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`prerequisite to an action for infringement. Palmer/Kane LLC v. Rosen Book Works LLC, No.
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`15 CV 7406, 2016 WL 4534896, at *3 (S.D.N.Y. Aug. 30, 2016) (citation omitted). Here,
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`Plaintiff has attached several purportedly valid certificates of registration to the Complaint, none
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`of which includes any description or image from which the Court could plausibly infer coverage
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`of any of the watches in the screenshots attached to the Complaint. For instance, although
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`Plaintiff claims that “the W03 All Chain Wrap Watch” has been infringed, it has not provided a
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`certificate of registration referencing any “W03” watch, nor alleged a plausible basis for a
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`determination that any of other certificates cover that particular watch. The same is true of a
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`number of watch titles referenced in the Complaint as to which no coverage by a certificate of
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`registration has plausibly been alleged. (See, e.g., Compl. ¶¶ 13, 28-29 (referencing “W07C
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`Asymettrical [sic] Crystal Watch” and “W07L-M Rosegold/RG style” watches).) Likewise, with
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`respect to Plaintiff’s “W04” and “W07” style watches, the Complaint appears to attach images of
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`various iterations of such watches, but the purported certificates of registration are devoid of
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`descriptive language or imagery that would support an inference that any of the watches shown
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`in the screenshots provided are covered by the certificates.
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`The Supplemental Declaration submitted by Plaintiff in response to the Court’s
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`December 12, 2016, Order only underscored the deficiency of Plaintiff’s pleadings.1 The
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`declaration proffers, without explanation, multiple and seemingly different watches as being
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`covered by single certificates of registration, and refers to watch titles that differ from the titles
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`in the certificates and the Complaint. (Compare e.g., Ex. B (Registration Number VA 1-876-624
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`for work titled “W04 All Chain Wrap Watch”) with Supplemental Declaration at ECF p. 4
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`(asserting that watches titled “W03/04 sm dial gold,” “W03/04 sm dial silver, ” and “W07C” are
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`all covered by Registration Number VA 1-876-624.)) In short, based on the Complaint, the
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`Court is unable to conclude that Plaintiff has provided a plausible factual basis from which to
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`infer that there is a valid copyright registration covering any of the specific watches shown in the
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`1
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`For the purposes of the motion to dismiss, the Court considers any information
`contained in the Supplemental Declaration beyond the Complaint as proffers with
`respect to a potential amended complaint.
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`screenshots attached to the Complaint. Accordingly, because the Complaint has not plausibly
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`pleaded on its face valid copyright registration covering any of the watch images submitted with
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`the Complaint, Defendants’ motion to dismiss the federal copyright claim is granted. Plaintiff’s
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`counsel claimed at oral argument that there is additional documentation that would establish the
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`coverage of the certificates of registration and also suggested that Plaintiff may claim protection
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`of certain watches as derivative works. Plaintiff will be given the opportunity to propose an
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`amended complaint.
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`2.
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`Federal Trade Dress Infringement Claim
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`Section 43(a) of the Lanham Act protects trade dress, which “encompasses the
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`overall design and appearance that make the product identifiable to consumers.” See Nora
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`Beverages, Inc. v. Perrier Group of America, Inc., 269 F.3d 114, 119 (2d Cir. 2001). “To plead
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`a claim of trade dress infringement involving the appearance of a product, [a plaintiff] must
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`allege that (1) the claimed trade dress is non-functional; (2) the claimed trade dress has
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`secondary meaning; and (3) there is a likelihood of confusion between the plaintiff’s good and
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`the defendant’s.” Sherwood 48 Assocs. v. Sony Corp. of Am., 76 F. App’x 389, 391 (2d Cir.
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`2003) (citation omitted). “A plaintiff must also offer a ‘precise expression of the character and
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`scope of the claimed trade dress.’” Id. (quoting Landscape Forms, Inc. v. Columbia Cascade
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`Co., 113 F. 3d 373, 381 (2d Cir. 1997)). This requires an articulation of which of the plaintiff’s
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`trade design elements are distinctive and how they are distinctive. See National Lighting Co.,
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`Inc. v. Bridge Metal Indus., LLC., 601 F. Supp. 2d 556, 562 (S.D.N.Y. 2009).
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`A product has acquired secondary meaning when, “in the minds of the public, the
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`primary significance of [the mark] is to identify the source of the product rather than the product
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`itself.” Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 114 (2d Cir. 2001) (internal quotation
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`marks and citation omitted). When determining whether a trade dress has secondary meaning,
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`courts consider several factors, including: (1) plaintiff’s advertising expenditures; (2) consumer
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`surveys linking the trade dress to a particular source; (3) sales success; (4) unsolicited media
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`coverage; (5) attempts to plagiarize the trade dress; and (6) the length and exclusivity of the use.
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`See Urban Grp. Exercise Consultants, Ltd. v. Dick’s Sporting Goods, Inc., No. 12 CV 3599,
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`2012 WL 3240442, at *6 (S.D.N.Y. Aug. 7, 2012). To meet the plausibility standard under
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`Twombly, a complaint must include sufficient facts to support an inference of secondary
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`meaning. See id. (holding that plaintiff inadequately pleaded secondary meaning where it failed
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`to allege facts relating to its advertising expenditures, consumer surveys, marketing coverage or
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`prior attempts to plagiarize plaintiff’s trade dress).
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`Here, Plaintiff’s allegations with respect to the claimed trade dress and any
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`secondary meaning are conclusory and insufficient to withstand the motion to dismiss. The
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`Complaint fails to articulate the precise nature of the trade dress Plaintiff purports to claim, and
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`merely contains a high level description of features of several watches, such as “gradient chain,”
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`“lobster claw closure,” and “leaf-shaped logo,” without allegations as to whether and how those
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`features are distinctive. See National Lighting Co., Inc., 601 F. Supp. 2d at 562 (dismissing
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`trade dress claim for failure to state with any degree of specificity, apart from “a laundry list of
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`the elements that constitute a lighting fixture’s design,” what plaintiff was endeavoring to protect
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`and how it was distinctive). Moreover, the Complaint fails plausibly to allege any facts that
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`could give rise to an inference of secondary meaning. Other than asserting in a conclusory
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`manner that Plaintiff is a “brand known primarily for its unique and famous Wrap Style
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`Watches,” and that “Plaintiff’s trade dress is widely recognized by consumers as being
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`associated with Plaintiff and has developed secondary meaning in the marketplace” (Compl. ¶¶
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`9, 50), the Complaint fails to plead any facts, such as ones relating to Plaintiff’s advertising
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`expenditures, consumer surveys, marketing coverage or prior attempts to plagiarize Plaintiff’s
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`trade dress, that would support a proper inference of secondary meaning.2 See Urban Grp.
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`Exercise Consultants, 2012 WL 3240442, at *7.
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`Accordingly, Defendants’ motion to dismiss the federal trade dress infringement
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`claim is granted.
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`3.
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`State Trademark Infringement and Trademark Dilution Claims
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`Plaintiff brings a trademark infringement claim under New York common law
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`and New York Gen. Bus. Law §§ 360-k and 260-o as well as a trademark dilution claim under
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`New York Gen. Bus. Law § 360-1.
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`The elements necessary to prevail on causes of action for trademark infringement
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`“under New York common law mirror the Lanham Act claims.” ESPN, Inc. v. Quiksilver, Inc.,
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`586 F. Supp. 2d 219, 230 (S.D.N.Y. 2008) (citations omitted). “To prevail on a trademark
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`infringement claim, plaintiff must prove that its mark is a protectible trademark and that
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`defendants’ use of the mark is likely to confuse consumers as to the source or sponsorship of
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`plaintiff’s product.” Le Book Pub. Inc. v. Black Boko Photography, Inc., 418 F. Supp. 2d 305,
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`311 (S.D.N.Y. 2005) (citing Nabisco Inc. v. Warner-Lambert Co., 220 F.3d 43, 45 (2d Cir.
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`2
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`In Plaintiff’s opposition brief to the motion to dismiss, it claims that its watches
`have been featured by “popular magazines, websites, and retail outlets.” (Pl. Opp.
`at 15.) It goes without saying that a Court does not consider assertions contained in
`briefs that are not pleaded in the Complaint. Moreover, being featured in magazines
`and websites, absent facts to support the additional factors outlined above, would
`not be sufficient to plead secondary meaning.
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`2000)).
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`New York law affords protection against dilution to marks that are distinctive as a
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`result of having acquired secondary meaning, as well as those that are inherently distinctive. See
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`New York Stock Exchange, Inc. v. New York, New York Hotel LLC, 293 F.3d 550, 558 (2d Cir.
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`2002). Claims for trademark dilution can be brought where there is “[l]ikelihood of injury to
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`business reputation or of dilution of the distinctive quality of a mark or trade name . . .
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`notwithstanding the absence of competition between the parties or the absence of confusion as to
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`the source of goods or services.” Van Praagh v. Gratton, 993 F. Supp. 2d 293, 305 (E.D.N.Y.
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`2014) (citing NYGBL § 360-1). New York law, however, does not permit a dilution claim
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`unless the marks in question—i.e. the “senior” mark and the “junior” mark—are “substantially”
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`similar. See Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97, 114 (2d Cir. 2009).
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`To prevail on a trademark dilution claim brought under § 360-1, a plaintiff must show “(1) that it
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`possesses a strong mark, one which has a distinctive quality or has acquired a secondary
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`meaning such that the trade name has become so associated in the public’s mind with the
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`plaintiff that it identifies goods sold by that entity as distinguished from goods sold by others,
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`and (2) a likelihood of dilution by either blurring or tarnishment.” See Gucci America, Inc. v.
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`Guess?, Inc., 868 F. Supp. 2d 207, 241 (S.D.N.Y. 2012).
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`Here, the Complaint does not allege that Defendants actually used Plaintiff’s
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`mark “SARA DESIGNS” or any trademarks even remotely similar to that mark and thus fails to
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`state a viable trademark infringement or dilution claim. The allegedly infringing watches
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`depicted in the attachments to the Complaint are marked with “NY & Co.” or “New York &
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`Company” logos. To the extent Plaintiff seeks to claim that the term “wrap style watch” or the
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`appearance of its watches constitutes a protectible trademark, it has proffered neither facts nor
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`legal theories sufficient to render viable the infringement and dilution causes of action.
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`Accordingly, Plaintiff’s state law trademark infringement and trademark dilution claims are
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`dismissed.
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`4.
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`State Unfair Competition and Unjust Enrichment Claims
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`Defendants move to dismiss Plaintiff’s state unfair competition and unjust
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`enrichment claims on the basis that they are preempted by federal law.
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`Plaintiff’s unjust enrichment claim, which arises from alleged misappropriation of
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`its copyrights (see Compl. ¶¶ 61-62), is preempted by the Copyright Act and is therefore
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`dismissed. See Gottlieb Dev. LLC v. Paramount Pictures Corp., 590 F. Supp. 2d 625, 637
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`(S.D.N.Y. 2008) (dismissing claims of unfair competition and unjust enrichment sound is
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`misappropriation of copyright as preempted by the Copyright Act). To the extent that Plaintiff’s
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`unfair competition claim is also based on misappropriation of copyright, that aspect of the claim
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`is also dismissed.
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`With respect to its unfair competition claim, Plaintiff repeats its allegations with
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`respect to the trade dress infringement claim. Trade dress infringement is a species of a common
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`law claim for unfair competition, and the elements of unfair competition under New York law
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`closely parallel the elements of unfair competition under the Lanham Act. See Medisim Ltd. v.
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`BestMed LLC, 910 F. Supp. 2d 591, 606 (S.D.N.Y. 2012). To assert a viable New York unfair
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`competition claim, Plaintiff must also allege facts indicative of bad faith. Heptagon Creations,
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`Ltd v. Core Grp. Mktg. LLC, No. 11 CV 1794, 2011 WL 6600267, at *9 (S.D.N.Y. Dec. 22,
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`2011). Since, as explained above, Plaintiff has not adequately pleaded a Lanham Act claim, its
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`New York unfair competition claim also fails. Moreover, its unfair competition claim would fail
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`for the additional reason that the Complaint has not adequately alleged bad faith.3
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`Accordingly, Defendants’ motion to dismiss Plaintiff’s unfair competition and
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`unjust enrichment claims is granted.
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`5.
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`State Deceptive Practices and False Advertising Claims
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`Plaintiff also brings a deceptive practices claim under New York Gen. Bus. Law §
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`349 and a false advertising claim under New York Gen. Bus. Law § 350. Defendants move to
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`dismiss these claim because, inter alia, Plaintiff has not alleged any injury to the public interest,
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`as required under the statutes.
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`A plaintiff bringing a claim for deceptive practices under Section 349 must prove:
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`(1) the challenged act or practice was consumer oriented; (2) that it was misleading in a material
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`way; and (3) that the plaintiff suffered injury as a result of the deceptive act. Merck Eprova AG
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`v. Brookstone Pharm., Inc., 920 F. Supp. 2d 404, 425 (S.D.N.Y. 2013) (citations omitted). A
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`claim of false advertising under Section 350 must meet all of the same elements as a claim under
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`Section 349, and the plaintiff must further demonstrate proof of actual reliance. Id. Corporate
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`competitors have standing to bring a Section 349 claim if “the gravamen of the complaint [is]
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`consumer injury or harm to the public interest,” see Securitron Magnalock Corp. v. Schnabolk, 65
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`F.3d 256, 264 (2d Cir. 1995), and “federal courts have determined that the provisions of [§§ 349
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`3
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`Other than the presence of NY & Co.’s representative at a public trade show and
`communication to Plaintiff of the desire to collaborate and the alleged similarity of
`the designs, Plaintiff has not alleged any facts in support of bad faith. (See Compl.
`¶¶ 23-26.) In Plaintiff’s opposition to the motion to dismiss, it asserts that it is
`plausible that the representative “engaged in the conversation with Sara Designs in
`order to learn non-publicly available trade secrets and insight about the production
`of ‘wrap watches’ to gain an unfair advantage in the marketplace.” (Pl. Opp. at 17.)
`That allegation does not appear in the Complaint; the Court does not consider it in
`connection with the instant motion practice.
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`and 350] require the sort of offense to the public interest which would trigger FTC intervention
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`under 15 U.S.C.A. § 45,” see U-Neek, Inc. v. Wal-Mart Stores, Inc., 147 F. Supp. 2d 158, 176
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`(S.D.N.Y. 2001) (citations omitted); see, e.g., Vitabiotics, Ltd. v. Krupka, 606 F. Supp. 779
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`(E.D.N.Y. 1984) (deceptive practices statute was violated when vitamin manufacturer sold
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`vitamins containing unlawful substances).
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`Here, Plaintiff has alleged no facts supporting an inference of harm to the public
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`interest or consumers outside of harm to its own products and its related property rights.
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`Defendants’ motion to dismiss the deceptive practices and false advertising claims is granted.
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`CONCLUSION
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`For the foregoing reasons, Defendants’ motion to dismiss the Complaint is granted
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`in its entirety, without prejudice to the filing of a motion for leave to file an amended complaint.
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`Plaintiff’s motion for a preliminary injunction is denied. In light of the dismissal of the
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`Complaint, the initial pre-trial conference scheduled for March 24, 2017, is adjourned sine die.
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`Plaintiff may, by March 3, 2017, file a motion for leave to amend its complaint.
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`Any such motion must be accompanied by a memorandum of law and a copy of the proposed
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`amended complaint that is blacklined to identify the proposed changes. Failure to make a timely
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`motion for leave to amend, or to demonstrate in such a motion that amendment would not be
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`futile, will result in dismissal of this action with prejudice.
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`This Memorandum Opinion and Order resolves docket entry number 22.
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`SO ORDERED.
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`Dated: New York, New York
`February 15, 2017
`
` /s/ Laura Taylor Swain
`LAURA TAYLOR SWAIN
`United States District Judge
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`SARADESIGNS.MTD
`
`VERSION FEBRUARY 15, 2017
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`14
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`