Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA332668
`ESTTA Tracking number:
`02/17/2010
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91179716
`Plaintiff
`School Specialty, Inc.
`Nicholas A. Kees
`Godfrey & Kahn, S.C.
`780 N. Water Street
`Milwaukee, WI 53202
`UNITED STATES
`docketing@gklaw.com, nkees@gklaw.com
`Response to Board Order/Inquiry
`Jennifer L. Gregor
`docketing@gklaw.com, jgregor@gklaw.com, nakees@gklaw.com
`/Jennifer L. Gregor/
`02/17/2010
`TTAB Letter.pdf ( 31 pages )(205940 bytes )
`
`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
`
`

`
`780 NORTH WATER STREET
`W1 532023.590
`TEL 414—273.35oo
`FAX 4142735198
`www.gkl21w.com
`
`2
`
`GODFREY
`-fl
`‘Q
`A TT 0 R N E Y 3 AT L AW
`
`SC
`
`Direct: 414-287-9223
`nakees@gIdaw.com
`
`February 17, 2010
`
`V FILED VIA ESTTA
`
`United States Patent and Trademark Office
`
`Trademark Trial and Appeal Board
`P.O. Box 1451
`
`Alexandria, VA 22313-1451
`
`RE:
`
`School Specialty, Inc. v. Seat Sack, Inc.
`Opposition No. 91 179716
`Serial No. 78/955,618
`Mark: SEAT SACK
`
`Atty. File No. 009316-0627
`
`Dear Ms. Faint:
`
`This letter is in response to the Board’s January 29, 2010 Order requesting that the parties
`to the above referenced opposition proceeding inform the board of the status of the civil action
`which occasioned the suspension of this proceeding. The referenced civil action is Seat Sack,
`Inc. v. Childcraff Education C0rp., Civil Action No. 07-cv—3344-RJH-DFE, in the United States
`District Court for the Southern District of New York.
`
`On January 22, 2010, the court in the aforementioned civil action issued a decision on the
`parties’ cross-motions for summary judgment and entered judgment in favor of defendants,
`Childcraft Education Corp., and School Specialty, Inc. In the summary judgment opinion, a
`copy of which is enclosed, the Court held that the Applicant’s mark SEAT SACK is merely
`descriptive and lacked secondary meaning. See Enclosed Opinion, Docket No. 75 at 24-26. On
`February 9, 2010, Seat Sack, Inc. filed a notice of appeal from the January 22, 2010 judgment
`and the underlying summary judgment opinion of the same date.
`
`Should the Trademark Trial and Appeal Board have any questions, please do not hesitate
`to contact the undersigned.
`
`Very truly yours,
`
`ODFREY&KAHN,S.C./
`
`Nicholas A. Kees
`
`'
`
`OFFICES IN MILWAUKEE, MADISON, W/AUKESHA, GREEN BAY AND Al-’I’LETON. WI: W/ASHINGTON, DC; AND SHANGHAI. PRC
`GODFREY Si KAHN IS A MEMBER OF TERRAl.EX®, A \)VORLl'.)\X/[DE NETWORK OF INDEPEN DENT LAW FIRMS.
`
`

`
`United States Patent and Trademark Office
`
`February 17, 2010
`Page 2
`
`Enclosure
`
`Edward M. Livingston (via email to em1pa@oomcast.net)
`Edward J. Carroll (via email to ec1aW@hVi.net)
`
`CC}
`
`4683877_1
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 1 of 29
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`------------------------------------x
`SEAT SACK, INC.,
`
`Plaintiff,
`
`07 Civ. 3344 (DFE)
`
`(This is an ECF case.)
`
`
`
`- against -
`
`CHILDCRAFT EDUCATION CORP., and
`SCHOOL SPECIALTY, INC.,
`
`Defendants.
`------------------------------------x
`
`OPINION AND ORDER
`
`DOUGLAS F. EATON, United States Magistrate Judge.
`
`Plaintiff Seat Sack, Inc. has alleged thirteen causes of
`action against the two defendants: Childcraft Education Corp.
`(“Childcraft”) and School Specialty, Inc. (“School Specialty”).
`
`In February 2008, I denied Plaintiff’s motion for a
`preliminary injunction. On January 27, 2009, the defendants
`filed a motion for summary judgment. (Docs. ##50-58.) On
`February 13, 2009, Plaintiff filed a cross-motion for summary
`judgment. (Docs. ##59-63.) On February 26, 2009, the defendants
`filed reply papers. (Docs. ##64-66.) On March 5, 2009, Plaintiff
`filed additional papers. (Docs. ##67-69.) On March 12, 2009,
`the defendants filed a motion to strike Doc. #67 and Doc. #69.
`(Docs. #70-71.) On March 13, 2009, Plaintiff filed papers
`opposing the motion to strike. (Docs. ##72-73.)
`
`For the reasons set forth in today’s Opinion and Order, I
`deny the defendants’ motion to strike (Doc. #70), I grant the
`defendants’ motion for summary judgment (Doc. #50), and I deny
`Plaintiff’s cross-motion for summary judgment (Doc. #59). I am
`today entering a Judgment in favor of the defendants.
`
`The Parties
`
`Childcraft is a New York corporation headquartered in
`Pennsylvania. At all relevant times, it has been a wholly-owned
`subsidiary of School Specialty, a Wisconsin corporation. (SOF
`1
`¶1.) School Specialty markets and sells educational products,
`
`1
`
` “SOF” refers to Doc. #51, Defendants’ Local Civil Rule
`56.1 Statement of Material Facts.
`
`-1-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 2 of 29
`
`programs and services to schools through various brands,
`including the “Childcraft” brand. (SOF ¶¶2-3.) Childcraft
`markets and sells thousands of various educational products
`through its catalog, website, and sales staff. (SOF ¶4.)
`
`Plaintiff is Florida corporation wholly owned by Anne
`McAlear. In the early 1980’s, she owned a company called The
`Nursery Collection, which manufactured infant bedding. Its
`number of employees grew from 3 to 38, and she sold the company
`around 1994. (4/4/08 McAlear Depo. Tr. 9-10.) In 1993, she
`designed the Seat Sack. In 1995, she retained a patent attorney
`and the U.S. Patent Office issued a design patent to her. The
`Seat Sack is a sack that drapes across the back of a student’s
`chair and holds school supplies. She began manufacturing it and
`selling it in 1995. In 1998, she started selling it to schools
`in large cities, including New York City. In 1999, she
`incorporated the business and hired one employee. (McAlear Depo.
`Tr. 14-25.)
`
`The Contractual Relationship
`Between Plaintiff and Childcraft
`
`At her deposition, Ms. McAlear vaguely recalled having
`conversations with Childcraft’s Liz Plotkin prior to late January
`2000: “I agreed to send samples and literature and pricing to her
`to see – - she was going to see about putting it [the Seat Sack]
`in the catalogue. That’s pretty much all of our first
`conversation.” (McAlear Depo. Tr. 23-24.)
`
`Q: .... Do you recall the substance of any other
`conversations with her other than your initial conversation?
`
`A: Not really.
`
`Q: Did you ever make any notes of conversations with
`Ms. Plotkin?
`
`A: No.
`
`(McAlear Depo. Tr. 41-42.)
`
`In late January 2000, Childcraft’s Liz Scott sent Ms.
`McAlear a one-page form entitled “Childcraft Education Corp.
`Exclusives – - Growing Years Catalog” (the “Agreement”). On
`January 28, 2000, after the word “Vendor,” Ms. McAlear wrote
`“Seat Sack Inc.” (the name of her corporation), and she signed
`the form as President. (SOF ¶6.) Childcraft has entered into
`this type of agreement with hundreds of vendors for the sale of
`
`-2-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 3 of 29
`
`thousands of products that are featured in Childcraft’s catalogs.
`(SOF ¶8.) The document said, in pertinent part:
`
`EXCLUSIVITY: We [Childcraft] are requesting
`information on the items listed below which are
`featured in Childcraft Education Corp.'s
`Growing Years Catalog. Terms of exclusivity include:
`
`CODE A. EXCLUSIVE PRODUCTS UNDER CHILDCRAFT LABEL:
`Products manufactured for Childcraft by other
`manufacturers/vendors and labeled with the Childcraft
`name.
`
`CODE B. EXCLUSIVE PRODUCTS NOT BEARING CHILDCRAFT
`LABEL but manufactured by a vendor who has given
`Childcraft the exclusive right to be the “sole source”
`of the product. .....
`
`CODE C. EXCLUSIVE COLLECTIONS: .....
`
`Please sign this page (or respond in writing if items
`are not exclusive to Childcraft) and return AS SOON AS
`POSSIBLE to Liz Scott at the fax number below.
`
`Thank you for your prompt response to this request.
`
`Product
`Description
`
`Childcraft
`Item #
`
`Vendor
`Item #
`
`Exclusivity
`Code
`
`SEAT SACK
`
`#370631
`
`seatsack3
`
`A
`
`This letter is to confirm exclusivity of the vendor's
`product(s) listed created for Childcraft Education
`Corp. .....
`
`It is undisputed that the Seat Sack was classified under
`“Exclusivity Code A.” Ms. McAlear testified as follows:
`
`Q: Isn’t it true that when the idea of exclusivity
`came up, your belief was that Childcraft was asking
`that you sell to Childcraft and to no one else?
`
`A: Yes, it was.
`
`Q: And then you called Liz Scott to talk about that,
`right?
`
`A: Yes. And that’s where all of this conversation
`
`-3-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 4 of 29
`
`came from.
`
`Q: What Ms. Scott told you in that conversation is no,
`that’s not accurate, we’re asking for the right to
`exclusively sell only those Seat Sacks that have the
`Childcraft name on them, isn’t that true?
`
`A: Right.
`
`(McAlear Depo. Tr. 73.)
`
`
`On those Seat Sacks which Plaintiff manufactured for
`Childcraft, the name “Seat Sack” was written in large print on
`the outside of the product; inside the product, Plaintiff placed
`a small Childcraft label with instructions about how to re-order
`the product from Childcraft. (McAlear Depo. Tr. 47-48.)
`Plaintiff added this label only to those Seat Sacks that were
`sold to Childcraft. (Id.; Pl’s Resp. to Interrog. No. 2,
`attached as Exh. C to Doc. #56.)
`
`
`Ms. McAlear testified as follows. The Agreement did not
`require Childcraft to buy Seat Sacks from Plaintiff. Childcraft
`never committed to buy a minimum number of Seat Sacks. (McAlear
`Depo. Tr. 53.) Plaintiff was free to sell Seat Sacks to other
`customers, provided that those Seat Sacks did not bear a
`Childcraft label. (Id. Tr. 73, 77.) At any time, Plaintiff
`could have told Childcraft that Plaintiff was no longer
`interested in selling to Childcraft, and Plaintiff could have
`requested that the Seat Sack not be placed in the Childcraft
`catalog. (Id. Tr. 90-91.)
`
`The Course-of-Dealing Relationship
`Between Plaintiff and Childcraft
`
`During the years from 2000 to 2005, Childcraft purchased
`thousands of Seat Sacks from Plaintiff. (Doc. #57, 8/23/07
`Murphy Decl. ¶¶5, 16, 18.) The purchases were made as follows.
`Childcraft would send a purchase order to Plaintiff, which would
`then manufacture and ship the requested Seat Sacks to Childcraft,
`together with an invoice. Childcraft always paid the invoices,
`and Plaintiff admits that Childcraft owes no money on any of
`Plaintiff’s invoices. (McAlear Depo. Tr. 83-84, 99.)
`
`The Seat Sacks purchased by Childcraft became part of the
`inventory of Childcraft, which in turn sold the Seat Sacks
`through Childcraft’s website and catalog. (Murphy Decl. ¶¶6,
`19.) Once Childcraft paid Plaintiff’s invoice, it is undisputed
`that Childcraft was free to resell the Seat Sacks at any price it
`
`-4-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 5 of 29
`
`chose. And Plaintiff was not entitled to any more payments, such
`as a percentage of Childcraft’s retail sales. (McAlear Depo. Tr.
`37, 84, 88-89.)
`
`Prior to Childcraft, Ms. McAlear had marketed through Babies
`R Us (it appears that this was only in connection with her prior
`company The Nursery Collection). (McAlear Depo. Tr. 39.)
`Starting in 2000, Childcraft was Plaintiff’s largest customer.
`Plaintiff started a small website in 2000, but it did not have
`the capacity to take an on-line order until around the end of
`2003. Plaintiff’s annual sales increased from roughly $10,000 in
`1999 to more than $20,000 in 2000. In each of the next four
`years, Plaintiff’s sales increased by 49% or more. By contrast,
`the annual growth was only about 8% in 2005 and 2006, and
`Plaintiff’s sales declined 5% in 2007. (McAlear Depo. Tr. 26-
`32.)
`
`For the year 2004, Plaintiff’s top four customers were:
`Childcraft (approx. $90,000), School Specialty (approx. $66,000),
`School Specialty’s other divisions (approx. $10,000) and a
`company named Demco (approx. $6,000). Plaintiff’s sales to
`Childcraft declined in 2004 and stopped in 2005. (2/12/09
`McAlear Aff. ¶9.) However, for the year 2007, School Specialty
`(the parent company of Childcraft, named as a defendant in the
`Complaint filed 3/5/07) was “probably” Plaintiff’s top customer,
`and it was still a customer as of 2008. As of 2008, Plaintiff
`had 3,000 customers, by Ms. McAlear’s rough estimate. (McAlear
`Depo. Tr. 159-62.)
`
`Around 2000, Ms. McAlear’s attorney invoked her design
`patent and sent a cease-and-desist letter to a company that was
`selling a similar product called the “Aussie Pouch.” That
`company’s attorney declined to stop, and Ms. McAlear decided not
`to sue. (McAlear Depo. Tr. 65-66.)
`
`Significantly, Ms. McAlear knew that Childcraft’s parent
`company (the co-defendant School Specialty) was the distributing
`agent for the Aussie Pouch. She did not object to that, and her
`company continued to sell the Seat Sack to School Specialty as
`well as to Childcraft. “Aussie Pouch and School Specialty were
`together long before I sold to Childcraft. Why would I dispute
`that?” (McAlear Depo. at Tr. 58.)
`
`At Tr. 60, Ms. McAlear answered the following question:
`
`Q: Let’s think then about 2002. Just pluck a year out
`of the air before the Seat Pocket ever became an issue.
`According to your understanding of Seat Sack’s
`
`-5-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 6 of 29
`
`relationship with Childcraft, if the 2002 Childcraft
`catalogue had included both the Seat Sack and the
`Aussie Pouch would that have violated any agreement
`between Childcraft and Seat Sack?
`
`A: No. ....
`
`However, at Tr. 61, there was a lunch break in the
`deposition. After lunch, she recanted the “No” answer she had
`given at Tr. 60. At Tr. 63, she said: “We had more of a
`fiduciary type of relationship.” At Tr. 69, she said that she
`had mixed up the “right to sell” with “my relationship with
`Childcraft.” (Tr. 69.) At Tr. 66, she asserted that
`Childcraft’s Liz Scott had said “that there would be no
`competition.” Ultimately, however, Ms. McAlear could not recall
`Ms. Scott ever saying that Childcraft would not sell competing
`products. Ms. McAlear testified:
`
`Q: .... Without regard to the Aussie Pouch or any
`other specific competitor, what did Ms. Scott say to
`you that led you to believe that Childcraft would not
`sell competing products?
`
`A: That they would just do - - it was an agreement
`that they would do their best to sell my product, and I
`would do my best to manufacture my product and get it
`to them in a timely manner. (Tr. 67.)
`
`* * * * *
`
`Q: I want to be very clear here. What I’m asking
`about right now is any conversations that you had with
`Ms. Scott. What did she say in those conversations
`that led you to believe that Childcraft would not sell
`a competing product?
`
`A: The exclusivity, when we talked about the exclusive
`right to sell. That was when we discussed whether they
`would sell another product that was the same as mine.
`
`Q: Did you ask about that?
`
`A: Well, I asked her - - I said to her, “If I’m
`selling these to you and you want to be exclusive, why
`would I do that?” And she told me the team of
`salespeople they had, the amount of catalogues they had
`going out, how they would do their best to sell my
`product.
`
`-6-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 7 of 29
`
` She didn’t say I’m going to do my best to sell your
`product and I’m going to bring in the Aussie Pouch.
`Sometime it’s the things you don’t say. (Tr. 67-68,
`emphasis added.)
`
`* * * * *
`
`Q: Did she ever say to you, again not in these words
`but in effect, we won’t sell a competing product?
`
`MR. CARROLL: Do you understand the question?
`
`A: I understand the question. I’m thinking about the
`answer.
`
`MR. CARROLL: That’s fine.
`
`A: Whether she actually said it or it was implied, I’m
`sorry, I can’t even tell you if it was actually said or
`implied. (Tr. 70-71, emphasis added.)
`
`Central to many of Plaintiff’s claims is Ms. McAlear’s
`assertion that there was a “special relationship” between
`Childcraft and Plaintiff. She may have believed that such a
`relationship existed, but such belief was not based on anything
`that Childcraft said or did. She testified:
`
`Q: You said that if customers would contact you, you
`would refer them to Childcraft?
`
`A: Yes.
`
`Q: Is that something Ms. Scott asked you to do?
`
`A: Also maybe it was implied if you have a customer
`like that that you had a relationship with. (Tr. 71,
`emphasis added.)
`
`* * * * *
`
`Q: You were free to sell Seat Sacks without the
`Childcraft name to anyone you wanted, correct?
`
`A: Without the Childcraft name[.] But we didn’t
`promote them to other companies like we did to
`Childcraft.
`
`Q: But that was your decision, wasn’t it?
`
`-7-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 8 of 29
`
`A: It was a relationship we had. It was like you
`don’t go and tell another woman how beautiful she is
`when you’re married. You just don’t. It’s a different
`relationship. Or seeking someone else.
`
`Q: Did Ms. Scott ever tell you[:] while you’re free
`to do so, we really would prefer it if you didn’t sell
`to anyone else?
`
`A: She said that they wanted to be first, they wanted
`their products out there first. .... (Tr. 73-74,
`emphasis added.)
`
`* * * *
`
`Q: .... As you sit here right now, do you recall any
`other conversations with Ms. Scott in which she said
`something that led you to believe that this was a
`special relationship?
`
`A: Every conversation we had led me to believe it was
`a special relationship. Just that she called me was a
`special relationship. If the president of Wal-Mart
`called you, don’t you think you’d have a relationship
`with them? 2
`
`Q: Anything other than the fact that she called you?
`
`A: It’s eight years now. Let me think.
`
`Q: Take your time.
`
`A: The conversation I had with her asking her if I
`could direct the people to Childcraft for any of my
`specials and that I would reduce Childcraft’s price.
`I didn’t do that to anyone else.
`Childcraft was the only one paying $3.95.
`Everyone else was paying $4.95. There was never a
`special or any advertising that I did that had a
`special that went to anyone else but Childcraft.
`
`Q: The special price was your idea, right?
`
`2
`
` There is no claim that Liz Scott was president of
`Childcraft. Ms. McAlear testified that she is not sure what
`position Ms. Scott held within Childcraft, simply that Ms. Scott
`was Childcraft’s contact with Plaintiff. (McAlear Depo. Tr. 34-
`35.)
`
`-8-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 9 of 29
`
`A: Yes, it was. It’s like having a realtor and you
`lower your price to sell. It’s like the relationship
`you have with your realtor.
`
`Q: Any other conversations that come to mind that you
`can recall with Liz Scott or anyone else at Childcraft
`that led you to believe that this was a special
`relationship?
`
`MR. CARROLL: A continuing objection to what a
`“special relationship” is.
`
`A: I think I have told you all of them. Let me think.
`(Tr. 81-83, emphasis added.)
`
`As mentioned earlier, right after the lunch break, Ms.
`McAlear asserted that Plaintiff and Childcraft had “more of a
`fiduciary type of relationship.” (Tr. 63.) “Fiduciary” is a
`word that carries extraordinary consequences, but questioning
`revealed that she was trying to apply that word to a very
`ordinary relationship with a large customer. At Tr. 72, she was
`questioned as follows:
`
`Q: First of all, can you describe what you mean
`when you say “fiduciary relationship”? What do
`you mean by that?
`
`A: It would be a relationship that we agreed upon
`that we – - how can I explain this – - that we were
`both in agreement of.
`
`Q: In what way was that relationship different than
`another relationship with a mom and pop store?
`
`A: A mom and pop store never said to me ... I’m
`going to give all of my efforts to sell your product
`and you give your efforts to deliver to me and
`help us to sell your product, you have to give us
`samples. Mom and pop stores wouldn’t do that, ....
`
`Q: Sending samples to salespeople, that’s a tool
`to sell Seat Sack, correct?
`
`A: Right.
`
`(McAlear Depo. Tr. 72.)
`
`-9-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 10 of 29
`
`Childcraft’s Introduction of the Seat Pocket
`
`It is undisputed that Plaintiff was entitled to sell the
`Seat Sack (without the Childcraft label) to anyone that Plaintiff
`chose. Childcraft alleges that it discovered, in 2003, that
`Plaintiff was offering to sell the Seat Sack to Childcraft’s
`competitors at a price lower than the price at which it sold to
`Childcraft, and that Plaintiff was offering the Seat Sack for
`sale directly to teachers at a price lower than offered in the
`Childcraft catalog. (SOF ¶¶27-28.) Plaintiff disputes this, but
`it is unnecessary to resolve that dispute. Regardless of who is
`right about that dispute, Childcraft was free to offer the public
`both the Seat Sack and a competing product. The competing
`product could be manufactured by one of Childcraft’s other
`suppliers, or by Childcraft itself.
`
`In July 2003, Childcraft began developing its own competing
`product. It is not radically different from the Seat Sack, but
`it contains two additional storage pockets and this creates a
`distinctive appearance; when it is draped on a chair and is
`viewed from the rear, the two pockets mimic the appearance of the
`two rear pockets on the seat of a pair of pants. Childcraft
`named its product the “Seat Pocket.” Ms. McAlear would have felt
`less aggrieved if Childcraft had taken three steps: if
`Childcraft had eschewed the word “Seat” and named the new product
`something like “Chair Pocket,” if Childcraft had kept its retail
`price for the Seat Sack at $9.95 rather than increasing it to
`$11.95, and if Childcraft had given Ms. McAlear specific notice
`about what it was doing. But the legal question is whether
`Childcraft was required to take any of those three steps.
`
`Childcraft began offering the Seat Pocket for sale through
`its catalog in January 2004. (SOF ¶32.) During 2004 and 2005,
`Childcraft continued to offer both Seat Sacks and Seat Pockets
`for sale. (Doc. #57, Murphy Decl. ¶16.) Childcraft’s last
`purchase of Childcraft-branded Seat Sacks occurred in or about
`September 2005. (Id. ¶18.) Plaintiff says that it did not
`learn about the existence of the Seat Pocket until 2006.
`
`On March 5, 2007, Plaintiff filed its Complaint in Supreme
`Court, New York County. The defendants removed the case to our
`Court on the basis of diversity of citizenship. Plaintiff says
`that our Court should apply the laws of New York to this lawsuit
`except for the claims of trademark infringement and design patent
`infringement. Defendants’ 1/27/09 memorandum, at page 16, fn. 5,
`says: “For purposes of this motion only, and without waiving any
`rights with respect to the choice of law, Childcraft Defendants
`
`-10-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 11 of 29
`
`will assume New York law applies.”
`
`Additional Facts Relevant to
`Plaintiff’s Trademark Claims
`
`Exhibit J to Ms. McAlear’s 2/12/09 affidavit is a printout
`from the Trademark Electronic Search System (“TESS”) of the U.S.
`Patent and Trademark Office. It shows that Plaintiff applied to
`register the word mark “Seat Sack” on May 15, 2000 but abandoned
`the application on February 5, 2002. It also shows that
`Plaintiff again applied to register the word mark “Seat Sack” on
`August 18, 2006, but that registration has not been granted to
`Plaintiff, who is still described by TESS as an “Applicant”
`rather than as a “Registrant.”
`
`Plaintiff chose the name “Seat Sack” because the product is
`a sack that works in conjunction with a seat. Likewise,
`Plaintiff chose names for its other products that describe the
`function of those products. Thus, Plaintiff sells a “File Drawer
`Sack,” and chose the name because the product is a sack that
`hangs on a file drawer. Plaintiff also sells a “Locker Sack,”
`which it named because the product is a sack that hangs inside a
`locker. Plaintiff’s “Office Sack” was so named because it is a
`sack that is designed for use in an office or cubicle. The
`“Lock-n-Sack” is designed for use in or on a child’s locker, and
`Ms. McAlear chose that name because that product “locked and it
`was a sack, and ‘Sack’ was my name.” (McAlear Depo. Tr. 126-27.)
`
`Additional Facts Relevant to Plaintiff’s
`Claim of Design Patent Infringement
`
`Ms. McAlear owns a design patent issued by the U. S. Patent
`and Trademark Office bearing number Des. 358,731, dated May 30,
`1995 (the ‘731 Patent). There is no evidence of any written
`assignment of the design patent from Ms. McAlear to her
`corporation. (SOF ¶70.) She incorporated her business in 1999.
`(McAlear Depo. Tr. 7-8.)
`
`The ‘731 Patent claims an “ornamental design for sack for
`hanging on the back of a chair, as shown.” The black and white
`drawings and figures in the patent depict an unadorned pouch from
`various angles. No other ornamentation is shown. (Exh. A to
`the 2/12/09 McAlear Affidavit.)
`
`Plaintiff testified that “anything that would go on the back
`of a chair I had an exclusive right to.” (McAlear Depo. Tr. 65.)
`However, her attorney’s memorandum of law makes no claim that she
`or her corporation has such a broad right.
`
`-11-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 12 of 29
`
`Additional Facts Relevant to
`Plaintiff’s Trade Secrets Claim
`
`Count IV alleges that Childcraft misappropriated
`Plaintiff’s trade secrets. According to Ms. McAlear, the alleged
`trade secrets are: “My design, my patent, the people that we were
`selling it to that I had them go directly to Childcraft.”
`(McAlear Depo. Tr. 100.)
`
`She admits that anyone holding a Seat Sack can see its
`design. (Id. Tr. 101.) Similarly, the design patent for the
`Seat Sack is a public record available for the world to see, as
`Ms. McAlear again admits. (Id. Tr. 103.) As for the names of
`customers that she had previously been selling to, it seems clear
`that she provided those names to Childcraft; there is no evidence
`that Childcraft “misappropriated” those names. (Id. Tr. 103.)
`
`SUMMARY JUDGMENT STANDARDS
`
`On a motion for summary judgment, we are not talking about
`the adequacy of Plaintiff’s pleadings; we are talking about the
`adequacy of Plaintiff’s evidence. Summary judgment is
`appropriate “if the pleadings, depositions, answers to
`interrogatories, and admissions on file, together with the
`affidavits, if any, show that there is no genuine issue as to any
`material fact and that the moving party is entitled to a judgment
`as a matter of law.” FED. R. CIV. P. 56(c). Summary judgment is
`the “put up or shut up” time for the party that brought the
`lawsuit. See Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d
`Cir. 2000) (quoting FLEMING JAMES, JR. & GEOFFREY C. HAZARD, JR., CIVIL
`PROCEDURE 150 (2d ed. 1977)). Accordingly, “the plain language of
`[Rule] 56(c) mandates the entry of summary judgment, after
`adequate time for discovery and upon motion, against a party who
`fails to make a showing sufficient to establish the existence of
`an element essential to that party’s case, and on which that
`party will bear the burden of proof at trial.” Celotex Corp. v.
`Catrett, 477 U.S. 317, 322 (1986).
`
`When opposing a motion for summary judgment, a plaintiff
`that has given testimony in a deposition cannot create a triable
`issue of fact by merely submitting an affidavit that contradicts
`the plaintiff’s deposition testimony. Perma Research & Dev. Co.
`v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969); see also Hayes
`v. New York City Dep't of Corrections, 84 F.3d 614, 619 (2d Cir.
`(1996).
`
`-12-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 13 of 29
`
`DISCUSSION
`
`The Complaint lists 13 causes of action, but I will refer to
`them as “counts” for the sake of brevity, since that is the
`terminology used in the Defendants’ 1/27/09 memorandum of law
`(Doc. #58). Also, I will address the 13 “counts” under five main
`headings. Essentially, I will put these main headings in the
`order used in Doc. #58, except that I will reverse the order of
`the fourth and fifth headings.
`
`First, I will address the claims that are resolved by
`reference to the contract, including the claims for breach of
`contract (Count V), breach of fiduciary duty (Counts IV and VI),
`conversion (Count III), and unjust enrichment (Count XIII).
`Second, I will address the fraud claims (Counts I and II).
`Third, I will address the trade secrets claim (part of Count IV).
`Fourth, I will address the claims of infringement of the design
`patent (parts of Counts VII and VIII). Fifth, I will address the
`trademark infringement claims and related claims (Counts VII
`through XII, and part of Count IV).
`
`FIRST (as to Counts III through VI, and XIII):
`Plaintiff’s Evidence Fails to Show Any Breach of
`Contract, or Breach of Fiduciary Duty, or Conversion,
`or Unjust Enrichment.
`
`The testimony of Plaintiff’s president, Ms. McAlear, does
`not contradict the declarations of Childcraft: the relationship
`between Plaintiff and Childcraft was an ordinary, run-of-the-
`mill, arms’ length agreement for the purchase of goods. The
`parties did not have a “special” relationship. Childcraft
`undertook no extraordinary obligations to safeguard Plaintiff’s
`interests or to act as Plaintiff’s “fiduciary.”
`
`A. The Relationship between Plaintiff and Childcraft
` Was Ordinary, Not “Special” or “Fiduciary.”
`
`The Seat Sack was just one of thousands of products that
`appear in Childcraft’s catalogs. (Doc. #53, Suchodolski Decl.
`¶6.) And Plaintiff was one of hundreds of vendors who sold
`products through those catalogs. (Id.) Nevertheless, Plaintiff
`argues that its relationship with Childcraft was “special,” and
`even “fiduciary.” But Plaintiff’s evidence does not support that
`argument.
`
`In Doc. #60, Ms. McAlear’s 2/12/09 affidavit, at ¶7, she
`says: “I was told in numerous discussions by Liz Scott and Lois
`Plotkin, Childcraft’s representatives, that Childcraft would act
`
`-13-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 14 of 29
`
`as Seat Sack, Inc.’s distributing agent and that Childcraft would
`use its best efforts to sell ‘Seat Sacks’ ....” For purposes of
`ruling on summary judgment, I assume that Childcraft made such
`statements. But such statements occurred in the undisputed
`context that Childcraft was purchasing for its own inventory, and
`was free to charge its customers whatever retail price it chose.
`
`B. Contrary to Count V, Childcraft
` Did Not Breach Any Contract with Plaintiff.
`
`The periodic purchase orders and invoices obligated
`Childcraft to pay Plaintiff for the Seat Sacks, and there is no
`claim that Childcraft breached that obligation. The 2/12/09
`affidavit of Ms. McAlear submits Exhibit J, a one-page Childcraft
`form entitled “2003 Vendor Profile.” Its third line said:
`“Vendor partnership agreement for calendar year 2003. The
`completion of this agreement will factor into all new product
`decisions.” Despite that one use of the word “partnership,” the
`document did not create any partnership in the legal sense of
`sharing risks and liabilities. To the extent that it was a
`contractual agreement, the document imposed obligations on
`Plaintiff as Vendor. For example, the document asked “Do you
`sell directly to schools?” and Plaintiff answered “No”; the
`document asked “Do you have a current Certificate of Insurance?”
`and Plaintiff answered “Yes.”
`
`Plaintiff does not specify any contractual obligation that
`was breached by Childcraft or its parent company. The defendants
`are entitled to summary judgment on Count V of the Complaint.
`
`
`C. Contrary to Counts IV and VI, Childcraft Did Not
` Undertake or Breach a Fiduciary Duty to Plaintiff.
`
`Count IV’s heading alleges “Deceptive Trade, Unfair Business
`Practices, Misappropriation of Trade Secrets, and Unfair
`Competition.” Count IV accuses the defendants of “gross malice”
`and “deceptive trade and practices while acting as plaintiff’s
`distributor and fiduciary.” (Compl. at ¶35.) Count VI’s heading
`seeks attorneys fees and costs. It accuses the defendants of
`“fraudulent actions ... while acting as a fiduciary and in breach
`of that duty to the plaintiff[.]” (Compl. at ¶42.)
`
`In Pan Am. Corp. v. Delta Air Lines, Inc., 175 B.R. 438,
`511-12 and n.64 (S.D.N.Y. 1994), Judge Patterson wrote:
`
`.... [W]hen “parties deal at arms length in a
`commercial transaction, no relation of confidence
`or trust sufficient to find the existence of a
`
`-14-
`
`

`
`Case 1:07-cv-03344-DFE Document 75 Filed 01/22/2010 Page 15 of 29
`
`fiduciary relationship will arise absent extra-
`ordinary circumstances.” [citations omitted] An
`ordinary contract is generally insufficient to