46 F. Supp. 3d 255
S.D.N.Y.2014Background
- Plaintiffs Audemars Piguet Holding S.A. (APSA) and Audemars Piguet (North America) Inc. (APNA) own and exclusively distribute the Royal Oak watch line, a 1972 design featuring an octagonal bezel with eight flat hexagonal screws; APSA holds four U.S. trademark registrations for aspects of that design.
- Defendants Swiss Watch International, ILS Holdings, and Lior Ben‑Shmuel sold the lower‑priced "Trimix" watches (SKUs SL‑10541, SL‑10534) with an octagonal bezel and eight flat screws; SWI sold ~43,000 Trimix units (July 2010–Apr 2013) and displayed them at BaselWorld 2011.
- Plaintiffs sent a cease‑and‑desist letter on May 3, 2012; Defendants did not alter the Trimix design or stop sales and continued distribution of existing orders after litigation began.
- The court found the Royal Oak trade dress nonfunctional, distinctive (secondary meaning) based on advertising, media recognition, sales, enforcement efforts, and a consumer survey showing 32–37% of respondents misidentified the Trimix as an Audemars watch.
- Applying Polaroid factors, the court found a likelihood of post‑sale confusion, determined Defendants acted in bad faith (Ben‑Shmuel led design changes), held Ben‑Shmuel individually liable, and denied Defendants’ counterclaims to cancel the trademarks.
- Remedies: permanent injunction barring manufacture/import/sale of the Trimix and confusing designs, mandatory recall of Trimix inventory at retailers, an accounting of profits ($3,257,739.82), trebling under 15 U.S.C. § 1117(b) to $9,773,219.46, and an award of attorneys’ fees; certain damages precluded prior to notice per 15 U.S.C. § 1111.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Trade dress protectability (functionality) | Royal Oak design (octagonal bezel + eight screws) is nonfunctional and protectable | Octagonal shape is utilitarian and therefore functional; no protection | Mark nonfunctional; protectable as combination of bezel + screws ( Plaintiffs prevail ) |
| Distinctiveness / Secondary meaning | Royal Oak has secondary meaning via advertising, press, sales, enforcement, survey | Third‑party octagonal watches show lack of exclusivity | Majority of secondary‑meaning factors favor Plaintiffs; mark has acquired secondary meaning |
| Likelihood of confusion (post‑sale) | Trimix is sufficiently similar; survey shows post‑sale confusion; bad‑faith adoption | Trimix bears Swiss Legend branding and some differences (canteen crown, screw spacing) | Polaroid analysis favors Plaintiffs; likelihood of post‑sale confusion found |
| Remedies (injunction, recall, profits, treble damages) | Injunction, recall, accounting, treble damages and fees appropriate given bad faith and counterfeit use | Relief should be limited; notice limits some recoveries prior to May 3, 2012 | Permanent injunction and recall ordered; accounting awarded; profits trebled under §1117(b) and attorneys' fees granted; some pre‑notice profit recovery barred under §1111 |
Key Cases Cited
- Christian Louboutin S.A. v. Yves Saint Laurent Am. Holdings, Inc., 696 F.3d 206 (2d Cir. 2012) (doctrine and tests for functionality and aesthetic functionality)
- Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101 (2d Cir. 2001) (product‑design trade dress distinctiveness and likelihood‑of‑confusion framework)
- Wal‑Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205 (2000) (secondary meaning requirement for product design trade dress)
- Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961) (multi‑factor test for likelihood of confusion)
- Malletier v. Burlington Coat Factory Warehouse Corp., 426 F.3d 532 (2d Cir. 2005) (post‑sale confusion analysis and memorability on serial viewing)
- Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208 (2d Cir. 1999) (absence of actual confusion after marketplace exposure as evidence against likelihood of confusion)