Threeline Imports, Inc. v. Vernikov
239 F. Supp. 3d 542
E.D.N.Y2017Background
- Threeline Imports sued Grigoriy Vernikov and Interpage International (Interpage Co.) for trademark infringement and counterfeiting of a chicken-and-egg logo; the case proceeded to a bench trial on liability after pretrial motions and a preliminary injunction.
- In Dec 2012 two containers of ALB-Gold pasta bearing the chicken-and-egg logo arrived at Threeline’s warehouse; invoices and labeling identified “Interpage Co.” and “Manufactured for Interpage Co.”
- Vernikov testified he contracted with ALB-Gold for his company Interpage Co., used the Delicious Wonders brand on labels, and sold multiple subsequent containers to various customers; he also worked for Threeline while operating Interpage.
- The Kerzhners (Threeline principals) created a similarly named entity, Interpage Co., Inc. (ICI), and at trial gave inconsistent testimony about which entity ordered or owned the product and marks; the court found their testimony not credible and found Vernikov credible.
- Threeline obtained federal registration for the chicken-and-egg mark in Nov 2014, but the court found defendants had priority of use dating to Dec 2012 and had continuously used the mark thereafter.
- The court held (1) plaintiff failed to prove valid prior rights and thus its Lanham Act infringement/counterfeiting claims failed, and (2) defendants established common-law and Lanham Act rights and prevailed on counterclaims for trademark infringement, unfair competition, false designation of origin, and unjust enrichment; damages to be decided later.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who owned the chicken-and-egg mark / priority of use? | Threeline claimed it used the mark first and later registered it. | Vernikov/Interpage argued they first used the mark in commerce (Dec 2012 shipments) and continuously thereafter. | Defendants had priority; first two containers inured to Interpage, not Threeline. |
| Effect of Threeline's federal registration | Registration creates presumption of validity and ownership. | Defendants argued the presumption is rebuttable by earlier bona fide commercial use. | Presumption rebutted: clear-and-convincing proof required for earlier applicant date; defendants met burden. |
| Lanham Act infringement / false designation (cross-claims) | Threeline argued defendants acquiesced or lacked priority; disputed consumer confusion / damages. | Defendants argued Threeline used a nearly identical mark and packaging causing inherent confusion; defendants had valid common-law rights. | Court found Threeline infringed defendants’ mark under §43(a); marks nearly identical and likely confusing. |
| New York common-law unfair competition and unjust enrichment | Threeline denied bad faith and claimed corporate/formality distinctions. | Defendants alleged bad-faith misappropriation, manipulation of records, and enrichment at defendants’ expense. | Court found Threeline acted in bad faith, liable for unfair competition and unjust enrichment. |
Key Cases Cited
- Arrow Fastener Co. v. Stanley Works, 59 F.3d 384 (2d Cir.) (likelihood of confusion standard in trademark infringement)
- La Societe Anonyme des Parfums Le Galion v. Jean Patou, 495 F.2d 1265 (2d Cir.) (priority of trademark use requires bona fide continuous commercial use)
- Hydro-Dynamics, Inc. v. George Putnam & Co., 811 F.2d 1470 (Fed. Cir.) (burden when claiming earlier date of use than in application)
- De Beers LV Trademark v. De Beers Diamond Syndicate, 440 F. Supp. 2d 249 (S.D.N.Y.) (registration creates presumption of validity)
- Two Pesos, Inc. v. Taco Cabana, 505 U.S. 763 (U.S. 1992) (§43(a) protects qualifying unregistered trademarks)
- Resource Developers, Inc. v. Statue of Liberty–Ellis Island Foundation, 926 F.2d 134 (2d Cir.) (actual confusion needed for damages unless intentional deception proven)