Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA712647
`ESTTA Tracking number:
`12/04/2015
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`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`92062536
`Defendant
`Worldwide Diamond Trademarks, Ltd.
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`WORLDWIDE DIAMOND TRADEMARKS LTD
`SUITE 2160 , 1066 WEST HASTINGS STREET
`VANCOUVER BC V6E 3X1,
`CANADA
`Motion to Suspend for Civil Action
`Melissa F. Nocera
`trademarkny@winston.com, tmdocket@winston.com
`/MFN/
`12/04/2015
`Motion_to_Suspend_Cancellation_Proceedings.pdf(24110 bytes )
`Exhibit A.pdf(598483 bytes )
`Exhibit B.PDF(197025 bytes )
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`Proceeding
`Party
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`Correspondence
`Address
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`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`In the Matter of Trademark Registration Nos. 4,535,012 and 4,650,623
`For the Marks: IDEAL CUSHION and IDEAL CUSHION and DESIGN
`Registered: May 20, 2014 and December 2, 2014
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`BLUE NILE, INC.,
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`Petitioner,
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`v.
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`WORLDWIDE DIAMOND
`TRADEMARKS, LTD.,
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`Registrant.
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`Cancellation No. 92062536
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`MOTION TO SUSPEND CANCELLATION PROCEEDINGS
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`The Registrant Worldwide Diamond Trademarks, Ltd. (“Worldwide Diamond”),
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`respectfully moves the Trademark Trial & Appeal Board (“Board”) for an order suspending all
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`proceedings in Cancellation No. 92062536 pending final disposition of parallel Federal district
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`court litigation in the United States District Court for the Southern District of New York
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`involving virtually identical subject matter between the same parties (the “Litigation”).
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`Worldwide Diamond makes this motion pursuant to 37 C.F.R. § 2.117 and Rule 510.02 of the
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`Trademark Trial and Appeal Board Manual of Procedure (“TBMP”).
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`BACKGROUND
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`The Registrant and Petitioner are currently involved in a dispute in the United States
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`District Court for the Southern District of New York, captioned Worldwide Diamond
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`Trademarks, Ltd. et al. v. Blue Nile, Inc. et al., case No. 1:14-cv-03521-VSB. Attached to this
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`Motion as Exhibit A is a copy of Worldwide Diamond’s Second Amended Complaint, the
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`operative complaint in the Litigation (sans exhibits). In its complaint, Worldwide Diamond
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`asserts claims of patent infringement, trade dress infringement, false designation or origin and
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`deceptive practices, unfair competition in violation of section 43(a) of the Lanham Act, 15
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`U.S.C. § 1125(a), and infringement of federally registered trademarks in violation of section 32
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`of the Lanham Act, 15 U.S.C. § 1114, as well as unfair competition and trademark claims under
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`New York law. On May 29, 2015, Blue Nile asserted counterclaims for declaratory judgment of
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`non-infringement and patent invalidity, among other counterclaims. Attached to this Motion as
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`Exhibit B is a copy of Blue Nile’s Amended Answer to the Second Amended Complaint and
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`Amended Counterclaims (sans exhibits). The action is currently pending and remains in the
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`discovery phase.
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`On May 20, 2014, Worldwide Diamond’s mark IDEAL CUSHION registered on the
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`supplemental register. On December 2, 2014, Worldwide Diamond’s design mark IDEAL
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`CUSHION registered on the supplemental register. On October 28, 2015, Petitioner Blue Nile,
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`Inc. (“Blue Nile”) instituted the instant Cancellation proceeding.
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`As is evident from the face of the pleadings, the Litigation raises the issues of whether
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`Blue Nile and a related company are infringing upon Trademark Registration Nos. 4,535,012 and
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`4,650,623, the same trademark registrations that are the subject of this Cancellation proceeding.
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`ARGUMENT
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`Because the final outcome of the Litigation will yield a construction of both the
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`Petitioner’s and the Registrant’s rights that would undoubtedly affect the present Cancellation, or
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`even obviate the need for the present Cancellation, to conserve both public and private resources
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`litigating duplicative matters in different fora, the Registrant respectfully requests to suspend the
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`present Cancellation proceedings pending a final resolution of the pending Litigation between
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`the Registrant and the Petitioner.
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`“Flowing from the Board’s inherent power to schedule disposition of the cases on its
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`docket is the power to stay proceedings, which may be exercised by the Board upon its own
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`initiative, upon motion, or upon stipulation of the parties approved by the Board.” TBMP
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`§ 510.01 (emphasis added) (footnotes omitted). 37 C.F.R. § 2.117 provides that the Board may
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`stay proceedings where parties to a case pending before the Board are engaged in a civil action
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`that may have a bearing on the proceedings before the Board. See also Opticians Ass’n of
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`America v. Independent Opticians of America, Inc., 734 F. Supp. 1171 (D.N.J. 1990), rev’d on
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`other grounds, 920 F.2d 187 (3d Cir. 1990). Moreover, the Trademark Trial & Appeal Board
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`Manual of Procedure recognizes that pending parallel Federal court litigation is a “common” and
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`acceptable reason for suspending Board proceedings:
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`Whenever it comes to the attention of the Board that a party or parties to a
`case pending before it are involved in a civil action which may have a
`bearing on the Board case, proceedings before the Board may be
`suspended until final determination of the civil action.
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`Most commonly, a request to suspend pending the outcome of another
`proceeding seeks suspension because of a civil action pending between the
`parties in a Federal district court. To the extent that a civil action in a
`Federal district court involves issues in common with those in a
`proceeding before the Board, the decision of the Federal district court is
`often binding upon the Board, while the decision of the Board is not
`binding upon the court.
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`* * *
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`Ordinarily, the Board will suspend proceedings in the case before it if the
`final determination of the other proceeding will have a bearing on the
`issues before the Board.
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`TBMP § 510.02(a) (footnotes omitted).
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`In any event, the Litigation between the parties in the District Court need not be identical,
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`but only have a “bearing” on the outcome of the proceeding before the Board to justify
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`suspension. See, e.g., Other Tel. Co. v. Conn. Nat’l Tel. Co., 181 U.S.P.Q. 125, 126-27
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`(T.T.A.B. 1974) (decision in civil action for infringement and unfair competition would have
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`bearing on outcome of Trademark Act § 2(d) claim before Board), pet. denied, 181 U.S.P.Q. 779
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`(Comm’r 1974); see also New Orleans La. Saints LLC v. Who Dat? Inc., 99 U.S.P.Q.2d 1550,
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`1552 (T.T.A.B. 2011) (civil action need not be dispositive of Board proceeding, but only needs
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`to have a bearing on issues before the Board).
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`As set forth above, Worldwide Diamond and Blue Nile are engaged in Federal district
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`court litigation that has both legal and factual “issues in common” with the Cancellation
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`proceedings before the Board. Specifically, as stated in paragraphs 57-62 of the Federal district
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`court complaint, Blue Nile seeks a declaration that Registrant’s IDEAL CUSHION marks “are
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`not valid trademarks conferring any proprietary rights.” The relief requested includes
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`declaratory relief that Blue Nile did not commit any trademark infringement or false designation
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`of origin, as stated in paragraph E of Blue Nile’s prayer for relief.
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`The final determination of the Federal district court litigation will not just “have a
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`bearing” on this Cancellation, but will fully determine the Cancellation’s outcome should the
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`court find that Registrant’s marks are valid and confer proprietary rights violated by Blue Nile.
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`In the trademark dispute alone, the district court can award relief that the Board is not
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`empowered to award, such as injunctive relief and damages. In addition, the district court will
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`also resolve other issues that are related but outside of the jurisdiction of the Board (i.e., the New
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`York state law claims).
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`Accordingly, under 37 C.F.R. § 2.117, it is permissible, proper, and efficient for the
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`Board to stay the instant Cancellation pending final disposition of the parallel Federal district
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`court litigation.
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`CONCLUSION
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`For the reasons set forth above, Worldwide Diamond respectfully requests that the Board
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`stay all proceedings in Cancellation No. 92062536 pending final disposition of Worldwide
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`Diamond Trademarks, Ltd. et al. v. Blue Nile, Inc. et al., case No. 1:14-cv-03521-VSB, in the
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`United States District Court for the Southern District of New York.
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`Dated: December 4, 2015
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`Respectfully submitted,
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` /s/ Ronald Y. Rothstein
`Ronald Y. Rothstein
`35 West Wacker Drive
`Winston & Strawn LLP
`Chicago, Illinois 60601
`Phone: 312.558.7464
`Fax: 312.558.5700
`rrothstein@winston.com
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`David A. Einhorn
`Baker & Hostetler LLP
`45 Rockefeller Plaza
`New York, New York 10111
`Phone: 212.589.4644
`Fax: 212.589.4201
`deinhorn@bakerlaw.com
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`Attorneys for Registrant Worldwide
`Diamond Trademarks, Ltd.
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`-5-
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`CERTIFICATE OF SERVICE
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`I hereby certify that a copy of the foregoing Registrant’s Motion to Suspend Cancellation
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`Proceedings has been served this 4th day of December, 2015, via U.S. mail and electronic mail
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`upon the following:
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`Peter J. Phillips Lucas & Mercanti, LLP
`475 Park Avenue, South
`New York, New York 10016
`pphillips@lmiplaw.com
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` /s/ Ronald Y. Rothstein
`Ronald Y. Rothstein
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`EXHIBIT A
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`Case l:14«evv03521«\/SB Document 5? Filed 021217115 Page 1 of 33
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`WORLDWIDE DIAMOND
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`.
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`TRADEMARKS, LTD, CROSSWORKS
`MANUFACTURING LTD., and HRA
`GROUP HOLDINGS LTD.,
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`Plaintiffs,
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`-against-
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`BLUE NILE, INC, and
`ATIT DIAMOND CORPORATION,
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`V Defendants.
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`VVVVVVVVVVVVVV
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`l4-CV-03521-VSB
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`SECOND AMENDED COMPLAINT
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`DEMAND FOR JURY TRIAL
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`Plaintiffs Worldwide Diamond Trademarks, Ltd., Crossworks Manufacturing Ltd., and
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`HRA Group Holdings Ltd. by and through their undersigned attorneys, hereby submit this
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`Second Amended Complaint against Defendants Blue Nile, Inc. and Atit Diamond Corporation
`requesting injunctive relief and damages for infringement of United States Patent No. D 688,970
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`(the “Patent”), trademark infringement, trade dress infringement, unfair competition, false
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`designation of origin and deceptive practices, injury to business reputation, and unjust
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`enrichment, and states as follows:
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`.
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`PARTIES.
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`1.
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`Plaintiff Worldwide Diamond Trademarks Ltd. (“Worldwide Diamond”) is a
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`British Columbia corporation having its principal place of business at Suite 2160, 1066 West
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`Hastings Street, Vancouver BC ‘V6E 3X1, Canada. Worldwide Diamond is an intellectual
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`property holding company and owns the trademarks, trade dress, and patents discussed herein
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`(“Intellectual Property”). Worldwide licenses the Intellectual Property to Crossworks.
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`2.
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`Plaintiff Crossworks Manufacturing Ltd.
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`(“Crossworks”)
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`is
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`a Northwest
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`Territories corporation having is principal place of business at Suite 2160, 1066 West Hastings
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`Case l:14~ev~03521~\/SB Document 57 Fiied 02f27f15 Page 2 of 33
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`Street, Vancouver, BC V6E 3X1. Crossworks purchases rough diamonds from De Beers and
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`Rio Tinto, among others, polishes those diamonds and sells them to, retailers. Crossworks
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`licenses the Intellectual Property from Worldwide.
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`3.
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`Plaintiff HRA Group Holdings Ltd. (‘fHRA”) is a British Columbia corporation
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`having its principal place ofbusiness at Suite 2160, 1066 West Hastings Street, Vancouver BC
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`V6E 3X1 , Canada.
`’4.
`Defendant Blue Nile, Inc. (“Blue Nile”) is a Delaware corporation having its
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`principal place of business at 411 First Avenue South, Suite 700, Seattle, Washington 98104.
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`5.
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`Defendant Atit Diamond Corporation (“Atit”) is a New York corpOration having
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`its principal place of business at 22 West 48th Street, Suite 300, New York, New York 10036.
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`JURISDICTION AND VENUE
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`6.
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`This is an action for patent infringement arising under the patent laws of the
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`V United States, Title 35 of the United States Code; for trademark infringement arising under
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`Section 32 of the Lanham Act, Title 15 of the United States Code; for unfair competition, false
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`designation of origin, and trade dress infringement arising under Section 43(a) of the Lanham
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`Act, Title 15 of the United States Code; and for Violations of the statutory and common laws of
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`New York.
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`7.
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`This Court has subject matterjurisdiction over this action under 28 U.S.C. §§
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`133]. and 1338(a) and pendantjurisdiction under 28 U.S.C. § 1367.
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`8.
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`This Court has personal jurisdiction over Atit because, among other things, upon
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`information and belief, it is organized in New York State, it retains its principal place of business
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`in this judicial district, it conducts a substantial portion of its business in this judicial district, it
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`has directiy infringed Plaintiffs Patent No. D688,970 S (the “‘970 Patent”) in this district, and
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`its infringing products are present and sold in this district.
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`9.
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`This Court has personal jurisdiction over Blue Nile because, among other things,
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`upon information and belief, it regularly conducts business with Atit and purchases infringing
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`Case 1:14~cv—03521~VSB Document 57’ Filed 02f2W15 Page 3 of 33
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`products manufactured by Atit, offering them for sale and selling them in this judicial district.
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`Further, Blue Nile, upon information and belief, conducts a substantial portion of its business in
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`this judicial district, has directly infringed the ‘970 Patent in this district, has infringed Plaintiff’s
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`trademark in this district, and advertises its infringing goods in this judicial district.
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`10.
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`Venue is proper in this Court under 28 U.S.C. §§ 1391 (b)-(d) and 1400(b)
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`because, upon information and belief, Defendants conduct a substantial portion oftheir
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`businesses in this judicial district, have infringed the ‘970 Patent and Plaintiffs trademarks in
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`this judicial district, have knowingly and/or intentionally distributed infringing goods or had
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`infringing goods distributed in this district, and have infringing products that are present and sold
`in this district.
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`PLAINTIFF’S INTELLECTUAL PROPERTY
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`A.
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`Plaintiff’s Design Patent
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`1]. Worldwide Diamond and its affiliated companies are among the largest buyers,
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`sellers, and manufacturers of diamonds and diamond jewelry in the United States.
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`12.
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`Within the diamond industry, two broad categories of polished diamonds are sold
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`for use in jewelry: “round cut” diamonds and “fancy cut” diamonds.
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`l3.
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`. As the name implies, round cut diamonds have a circular cross-section, while
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`fancy cut diamonds come in a variety of other shapes, including diamonds with square cross-
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`sections (for example, “princess cut” diamonds); diamonds having a rectangular cross-section
`with beveled corners (such as “emerald cut” diamonds); and “cushion cut’l’ diamonds, whose
`cross-section is square or rectangular but with rounded corners. FOr this reason, fancy cut
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`diamonds are sometimes referred to collectively as “non-round” diamonds. (Hereafter “non-
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`round diamonds”)
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`14. Worldwide Diamond has developed a novel design for a cushion cut gemstone
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`(the “Protected Cushion Cut”).
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`Case 1:14—cvu03521~\/SB Document 57 Filed 02/27115 Page 4 of 33
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`15.
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`The United States Patent and Trademark Office acknowledged the novel, non~
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`obvious, and ornamental appearance of the Protected Cushion Cut by issuing the “’970 Patent for
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`a “Cushion shaped gemstone” on September 3, 2013. Exhibit A is a copy of the ‘970 Patent.
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`16. Worldwide Diamond is the lawful owner of all right, title and interest in the ‘970
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`Patent and the Protected Cushion Cut.
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`B.
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`Plaintiff’s Hearts and Arrows Trade Dress
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`>17.
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`Certain cuts of round diamonds are known to display a “hearts and arrows”
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`pattern when viewed through a gem scope.
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`18..
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`Such gem scopes, sometimes known as “hearts and arrows scopes,” are
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`commonly used in the industry by both retail customers and individual customers when making
`purchasing decisions. ,
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`V
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`1.9.
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`The hearts and arrows pattern displayed by such perfectly round cut diamonds is
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`due to the perfect symmetry of their round shape, which enables round diamonds to be cut in
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`highly symmetric patterns.
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`20.
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`Worldwide Diamond is the. inventor of a novel square diamondcut, whose unique
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`features also display a hearts and arrows pattern like that previously found only in perfect round-
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`cut diamonds.
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`21.
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`‘ Prior to the invention by Worldwide Diamond of the square diamond displaying
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`the hearts and arrows pattern, no non-round or fancy cut diamonds in the United States displayed
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`a similar hearts and arrows pattern.
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`22.
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`After Worldwide Diamond successfully created the square shaped diamond
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`whose unique features also display a hearts and arrows pattern, Worldwide Diamond
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`successfully created the cushion shapeddiamond whose features also display a hearts and arrows
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`pattern.
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`23.
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`Prior to the invention by worldwide Diamond of the cushion shaped diamond
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`whose features dispiay a hearts and arrows pattern, no non-round or fancy cut diamonds in the '
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`Case 1:14wcv-03521HV8E3 Document 57 Filed 02127118 Page 5 of 33
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`United States, other than Worldwide Diamond’s square diamonds, displayed the hearts and
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`arrows pattern.
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`24.
`As such, Worldwide Diamond is the creator and owner of distinctive non-round
`diamonds, such as a cushion cut or square cut diamond, that display a hearts and arrcws pattern
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`when viewed at low magnification through gem scopes typically used to View diamonds in the
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`diamond industry (the “Hearts and Arrows Trade Dress”).
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`25.
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`Exhibit B is a picture of the Hearts and Arrows Trade Dress of a cushion cut
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`diamond.
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`26.
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`Exhibit C is a picture of the Hearts and Arrows Trade Dress ofa cushion cut
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`diamond when viewed with a red filtered colored light scope.
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`‘ 27. Woridwide Diamond is Well known to retailers and consumers within the
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`diamond industryas the originator and sole source of the Hearts and Arrows Trade Dress.
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`28.
`1 Worldwide Diamond and its affiliated companies have sold diamonds bearing the
`Hearts and Arrows Trade Dress in interstate commerce in the United States since 2008.
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`29. Worldwide Diamond has spent substantial sums and energies in designing,
`developing, marketing, and promoting its diamonds bearing the Hearts and Arrows Trade Dress
`in interstate commerce in the United States.
`30.
`Because Worldwide Diamond’s non-round diamonds display a hearts and arrows
`pattern previously found only in round diamonds, these diamonds sell for prices commensurate
`with the sales prices for round diamonds.
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`31. Worldwide Diamond and its affiliated companies have sold more than 8,200
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`diamonds embodying the Hearts and Arrows Trade Dress in interstate commerce in the United
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`States since 2008, generating more than $23.5 00,000 gross sales. During this time, Worldwide
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`Diamond has acquired substantial goodwill due to its extensive and continuous use of the Hearts
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`and Arrows Trade Dress.
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`32.
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`Worldwide Diamond has spent significant time, effort, and money advertising its
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`diamonds bearing the distinctive Hearts and Arrows Trade Dress.
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`Case 1:14»cv~03521~\/SB Document 57 Filed 02/27/15 Page 6 of 33
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`33.
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`34.
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`The Hearts and Arrows Trade Dress is inherently distinctive and non-functional.
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`The Hearts and Arrows Trade Dress has acquired secondary meaning in the minds
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`of consumers through nationwide, continuous, and exclusive use for more than six years, as Well
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`as through unsolicited media attention, commercial success, and substantial adVertising and
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`promotion.
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`35.
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`In the minds of consumers, the Hearts and Arrows Trade Dress stands for and
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`identifies a single source of high—quality, unique non-round diamonds that display the hearts and
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`arrows pattern. Consumers, including customers and industry professionals, identify and
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`associate the Hearts and Arrows Trade Dress with Worldwide Diamond.
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`C.
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`Plaintiff’s IDEAL CUSHION Trademark
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`36. Worldwide Diamond is the owner of all right, title and interest in the trademark
`IDEAL CUSHION.
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`37. Worldwide Diamond owns common law rights in the IDEAL CUSHION mark in
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`the United States, since it has used the mark continuously since September, 2012 in commerce in
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`the United States, including in the State of New York, to signify the source or origin of
`Worldwide Diamond’s cushion-cut diamonds. ,
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`38.
`The IDEAL CUSHION mark is registered for “diamonds and diamond jewelry”
`on the Supplemental Register of the United States Patent and Trademark Office as US. Reg. No.
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`4535012, issued May 20, 2014. Exhibit D is a copy of the registration certificate.
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`39.
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`Worldwide Diamond also is the owner ofthe IDEAL CUSHION word. and design
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`mark, IDLAL GUS. HON erg, , which is registered for “diamonds and diamond jewelry,” on the
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`Supplemental Register of the United States Patent and Trademark Office as US. Reg. No.
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`4650623, issued December 2, 2014 (together with the common law IDEAL CUSHION mark and
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`US. Reg. Ser. No. 4535012, the “Ideal Cushion Marks”). Exhibit E is a copy of registration
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`certificate.
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`Case 1:14-cvu03521n‘x/SB Document 57 Filed 02127715 Page 7 of 33
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`40.
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`Beginning in or about September 2012, Worldwide Diamond and its affiliated
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`companies adopted and began to use the Ideal Cushion Marks to advertise, promote, distribute
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`and sell cushion cut diamonds bearing the Hearts and Arrows Trade Dress in interstate
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`commerce, throughout the United States, including in the State of New York.
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`41.
`Since September 2012, the Ideal Cushion Marks have been continuously used in
`the United States, including in the State ofNew York, by Worldwide Diamond to signify the
`source or origin of Worldwide Diamond’s cushion-cut diamonds bearing the Hearts and Arrows
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`Trade Dress.
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`42.
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`Worldwide Diamond has used and is using the Ideal Cushion Marks to identify its
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`high-quality, exclusive and proprietary cushion-cut diamonds and to distinguish these diamonds
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`from those offered by others.
`43.
`Worldwide Diamond’s diamonds sold under the Ideal Cushion Marks are
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`recognized by the consuming public as deriving from Worldwide Diamond.
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`44.
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`Worldwide Diamond has invested significant time, money and resources to the
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`advertising and promotion of its diamonds sold in connection with the Ideal Cushion Marks. Its
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`advertising efforts have included substantial advertising in print, on the Internet, at trade shows,
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`on radio and television, through the development and dissemination of training videos and in-
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`person trainings, and through iii-person campaigns and events, and on celebrity placements.
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`Worldwide Diamond has used the Ideal Cushion Marks to advertise its diamonds in at least
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`thirteen publications to date.
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`45.
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`As a result of substantial advertising, marketing and promotional efforts and
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`expenditures, as well as substantial sales, Worldwide Diamond’s cushion-cut diamonds bearing
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`the Hearts and Arrows Trade Dress have become well and favorably known in the United States.
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`46.
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`As a result of substantial advertising, marketing and promotional efforts and
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`expenditures, as well as substantial sales of cushion-cut diamonds bearing the Hearts and Arrows
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`Trade Dress in the United States, Worldwide Diamond has become well-known as a provider of
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`high-quality cushion-cut diamonds in the United States with hearts and arrows.
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`Case 1:14-ev—03521-VSB DocumentS? Filed 02/27f15 PageSotBB
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`47.
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`As a result of substantial advertising, marketing and promotional efforts and
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`expenditures, as well as substantial sales of cushion~cut diamonds in association with the Ideal
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`Cushion Marks, the Ideal Cushion Marks have become distinctive and well and favorably known
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`as indicating Worldwide Diamond as the source or origin of its diamonds bearing that brand.
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`48. Worldwide Diamond’s Intellectual Preperty, including the ‘970 Patent, the Hearts
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`and Arrows Trade Dress and associated goodwill, and the Ideal Cushion Marks and associated
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`goodwill are all valuable assets of Worldwide Diamond.
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`DEFENDANTS’ INFRINGEMENT OF
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`THE HEARTS AND ARROWS TRADE DRESS
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`49.
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`Upon information and belief, Blue Nile, an online retailer of diamonds and
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`diamond jewelry, sells and offers for sale in New York and throughout the United States non-
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`round diamonds that feature design elements which display a hearts and arrows pattern
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`confilsingly similar to the Hearts and Arrows Trade Dress (the “Infringing Diamonds”). The
`Infringing Diamonds are cushion-shaped diamonds that display an optical “hearts and arrows” in
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`the presence of light, confusingly similar to the Hearts and Arrows Trade Dress of Worldwide
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`Diamond. Blue Nile’s advertising describes its Infringing Diamonds as “Signature Hearts and
`Arrows Cushion~cut Diamonds”.
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`50.
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`Upon information and belief, Atit is a manufacturer and wholesaler of diamonds
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`and diamond jewelry. Atit manufactures for sale in the United States and sells and offers to sell
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`in the United States Infringing Diamonds.
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`5 1.
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`Upon information and belief, recognizing the financial value of Worldwide
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`Diamond’s diamonds featuring the Hearts and Trade Dress, Defendants purposely copied
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`1 Plaintiff 3 diamond in substantial part so'that the resulting cushion-cut diamond would also
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`display the hearts and arrows pattern.
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`52.
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`Upon information and belief, Defendants are selling Infringing Diamonds in the
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`same channels of trade and to the same consumers as those targeted by Worldwide Diamond.
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`Case 1:14~cv;03521»VSB Document 57' Filed 02127f15 Page 9 of 33
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`53.
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`Defendants are selling Infringing Diamonds directly to consumers at the same
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`price at which Plaintiff’s diamonds bearing the Hearts'and Arrows Trade Dress are sold to
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`Plaintiffs’ wholesalers and retailers.
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`54.
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`Defendants’ offer for sale and sale of Infringing Diamonds, whose trade dress is
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`confiisingly similar to the Hearts and Arrows Trade Dress, have caused and will continue to
`cause a likelihood of deception and confusion in the marketplace among consumers, resulting in
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`‘ extensive damage to Worldwide Diamond and its business, goodwill, and reputation.
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`55.
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`Consumers purchasing Infringing Diamonds are likely to mistakenly believe that
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`the Infringing Diamonds are associated with, connected to, affiliated with, or related to
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`Worldwide Diamond.
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`5 6.
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`Defendants’ infringement of the Hearts and Arrows Trade Dress is willful and in
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`bad faith.
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`BLUE NILE’S INFRINGEMENT,
`OF THE IDEAL CUSHION TRADEMARK
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`Upon information and belief, sometime after Worldwide Diamond adopted and
`57.
`began using the Ideal Cushion Marks in association with its diamonds bearing the Hearts and
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`Arrows Trade Dress, Defendant Blue Nile began using the trademark SIGNATURE IDEAL
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`CUSHION in connection with the advertising, promotion, sale and distribution of the Infringing
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`Diamonds.
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`58. Without consent from Worldwide Diamond, Blue Nile has used and is using on its
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`website trademarks confusingly similar to the Ideal Cushion Marks to sell the Infringing
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`Diamonds.
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`59.
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`Upon information and belief, Blue Nile is using trademarks confusingly similar to
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`the Ideal Cushion Marks on its webpage, in its URL, and in its metatags to advertise, promote,
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`and sell diamonds in the same channels of trade and to the same consumers as those targeted by
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`WOrldwide Diamond.
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`Case 1:1’4-cv-03521-VSB Document 57 Filed 02/27115 Page 3.0 of 33
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`60.
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`Blue Nile’s offer for sale and sale of diamonds in connection with trademarks
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`confusingly similar to the Ideal Cushion Marks, have caused and will continue to cause a
`likelihood of deception and confusion in the marketplace among consumers, resulting in
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`extensive damage to Worldwide Diamond and its business, goodwill, and reputation.
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`61.
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`Blue Nile, by its activities, has improperly capitalized on the substantial goodwill
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`in Worldwide Diamond’s Ideal Cushion Marks. ,
`62.
`Consumers purchasing diamonds from Blue Nile are likely to mistakenly believe
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`that Blue Nile’s diamonds are aSSociated with, connected to, affiliated with, or related to
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`Worldwide Diamond.
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`63.
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`. Blue NiIe’s infringement of the Ideal Cushion Marks is willful and in bad faith.
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`DEFENDANTS’ INFRINGEMENT OF THE ‘970 PATENT
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`64.
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`By selling and offering for sale Infringing Diamonds in the United States, Blue
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`Nile is infringing the ‘970 Patent.
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`Atit also is infringing the ‘970 Patent by, upon information and belief,
`65.
`manufacturing and/or selling and offering to sell in the United States the Infringing Diamonds.
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`66.
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`Defendants” product is virtually identical to the Plaintiff’s patented product. Upon
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`information and belief, Defendants obtained a diamond covered by the ‘970 Patent and
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`substantially copied it in order to‘ present it as their own product and to improperly profit from
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`Worldwide Diamond’s ‘970‘Patent. An ordinary observer (who was conversant with the prior ‘
`art designs) would think that the Infringing Diamonds are substantially the same as the patented
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`design.
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`67.
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`infringement ofthe ‘970 Patent arises under the patent laws ofthe United States
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`and, in particular, 35 U.S.C. § 271 ct. seq.
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`68.
`Blue Nile’s infringement ofthe ‘970 Patent is willful and in bad faith. Blue
`Nile’s copying of the patented ornamental appearance of Worldwide’s Protected Cushion Cut
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`and its infringing activities were conducted despite an objectively high likelihood that such
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`Case 1:14wev—03521-VSB Document 57 Filed 02/27/15 Page 13‘. of 33
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`activities amounted to infringement. Blue Nile knew, or should have knoWn, of the risk of
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`infringement.
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`IRREPARABLE HARM
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`69.
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`Worldwide Diamond has spent considerable time, money, effort, and resources
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`developing and registering the ‘970 Patent and the Ideal Cushion Marks as well as developing,
`manufacturing, advertising, promoting, offering for sale, and selling diamonds bearing the Hearts
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`and Arrows Trade Dress and in association with theIdeal Cushion Marks.
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`70.
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`Through its significant efforts and investment, Worldwide Diamond has gained
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`substantial goodwill and distinction as a provider of high-quality, unique diamonds.
`71.
`V Defendants’ use of the Hearts and Arrows Trade Dress, use of trademarks
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`confusingly similar to the Ideal Cushion Marks, and saleof the Infringing Diamonds has
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`removed control over the quality of products attributable to Worldwide Diamond and has placed
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`Worldwide Diamond’s reputation in the hands of Defendants, who are competitors.
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`72.
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`Further, Defendants’ sale of the Infringing Diamonds and use of the Ideal
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`Cushion Marks or colorable imitations thereof has harmed Worldwide Diamond’s reputation and
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`position as the owner of the ‘970 Patent and the Idea} Cushion Marks, and as the exclusive
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`source of nonwround diamonds bearing the Hearts and Arrows Trade Dress.
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`73.
`' Defendants have gained an unfair competitive advantage and been unjustly
`enriched by capitalizing on the time and financial resources Worldwide Diamond invested in (a)
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`developing the diamonds sold in association with the Ideal Cushion Marks and bearing the
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`Hearts and Arrows Trade Dress and (b) obtaining the “970 Patent.
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`Defendants have damaged and Will continue to damage Worldwide Diamond by
`74.
`unfairly taking advantage of and benefitting from the extensive time, money, and effort
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`Worldwide Diamond has spent advertising and promoting its diamonds in connection with the
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`Ideal Cushion Marks and bearing the Hearts and Arrows Trade Dress.
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`Case 1:14-cv-03521—VSB Document 57 Fiied 0227/15 Page 12 of 33
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`75.
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`In manufacturing, marketing, and selling the Infringing Diamonds and improperly
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`using trademarks substantially the same as the Ideal Cushion Marks, Defendants have gone far
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`, beyond fair competition and seek to trade on and profit from Worldwide Diamond’s efforts and
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`investments without using their oWn resources, investing their oWn time or money, or exerting
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`any of their OWn creative effort. »
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`76.
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`Absent a preliminary and permanent injunction, Defendants will benefit at the
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`expense of Worldwide Diamond’s many years of investment, risk-taking, and ingenuity.
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`77.
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`Finally, Defendants are selling diamonds, including Infringing Diamonds, directly
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`to consumers at the same price that Worldwide Diamond sells its products to retailers. Because
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`the retailers then mark up the cost of the Plaintiff’s products to consume