Crye Precision LLC v. Duro Textiles, LLC
689 F. App'x 104
2d Cir.2017Background
- Crye Precision and Lineweight sued Duro Textiles alleging breach of a non-compete provision, trade dress infringement (MULTICAM) and unfair competition based on Duro’s production of the Army’s Scorpion W2 pattern.
- The district court denied injunctive relief, granted summary judgment to Duro on all claims, and denied Crye additional discovery under Fed. R. Civ. P. 56(d).
- The non-compete prohibited Duro from making products “similar to MULTICAM through color palette, pattern, arrangement or placement.”
- Crye offered limited evidence of consumer confusion (a video of an Army general) and argued Duro acted in bad faith; Duro argued similarities derived from the Army’s independent development/purchase of W2.
- Crye contended the non-compete could be judicially narrowed (blue‑penciled) and that further discovery was necessary; the courts found the clause unenforceable as overly broad and additional discovery unnecessary.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of non‑compete clause | Clause reflects parties' intent and should be enforced; scope can be limited by court | Clause is unreasonably broad (would bar many camouflage patterns) and unenforceable | Clause unreasonable on its face; summary judgment for Duro on breach claim |
| Blue‑penciling restrictive covenant | Court could impose time/shape limits (e.g., six years) to save clause | Terms (color palette, pattern, arrangement) are core and not severable | Court properly declined to blue‑pencil; clause remains unenforceable |
| Trade dress infringement (likelihood of confusion & bad faith) | MULTICAM merits protection; video suggests confusion; Duro acted in bad faith | No evidence consumers (Army) were likely confused; similarities traceable to Army, not Duro | No genuine issue of material fact on confusion or bad faith; summary judgment for Duro |
| Denial of Rule 56(d) discovery | Additional discovery needed to show confusion/bad faith and facts to oppose summary judgment | Requested discovery would be cumulative/speculative and unlikely to change result | District court did not abuse discretion in denying Rule 56(d) relief |
Key Cases Cited
- BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (N.Y. 1999) (reasonableness and blue‑pencil framework for restrictive covenants)
- Polaroid Corp. v. Polaroid Elecs. Corp., 287 F.2d 492 (2d Cir. 1961) (eight‑factor likelihood‑of‑confusion test)
- Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97 (2d Cir. 2009) (likelihood of confusion standard; bad‑faith intent must be intent to confuse)
- Nora Beverages, Inc. v. Perrier Grp. of Am., Inc., 269 F.3d 114 (2d Cir. 2001) (definition of trade dress)
- In re Dana Corp., 574 F.3d 129 (2d Cir. 2009) (Rule 56(d) discovery may be denied if requests are speculative or cumulative)
- Law Debenture Trust Co. of N.Y. v. Maverick Tube Corp., 595 F.3d 458 (2d Cir. 2010) (written agreement controls parties’ intent)
- Mohawk Maintenance Co. v. Kessler, 52 N.Y.2d 276 (N.Y. 1981) (New York approach to evaluating non‑compete reasonableness)