709 F. App'x 44
2d Cir.2017Background
- Victorinox (and related entities) own a registered trademark for two elongated oval red scales (Swiss Army trade dress) on multifunction pocketknives; they sued B&F and John Meyer for Lanham Act trademark infringement.
- District court granted summary judgment for Victorinox, found wilful infringement, awarded treble profits, attorneys’ fees, and issued a permanent injunction; B&F and Meyer appealed.
- Defendants argued the mark should be cancelled for fraud and functionality, disputed likelihood of confusion/bad faith, challenged the damages award (profits without cost deductions), sought relief under Rule 60(b)(2) based on newly discovered letters, and moved to disqualify Plaintiffs’ counsel (Locke Lord) for concurrent representation.
- The Second Circuit reviewed summary judgment de novo and Polaroid factors for likelihood of confusion; it treated registration as prima facie evidence of validity and non-functionality.
- The court affirmed infringement, wilful bad faith, and most remedies, but found the injunction overbroad in parts and remanded to narrow it; it rejected cancellation, the Rule 60 motion, and the disqualification claim.
Issues
| Issue | Victorinox's Argument | B&F/Meyer Argument | Held |
|---|---|---|---|
| Validity: fraud in PTO application | Mark is valid; registration is prima facie evidence of validity | PTO registration procured by fraudulent omissions/quoting (Forschner) | Fraud claim fails — no showing of deliberate, material misrepresentation to PTO |
| Validity: functionality | Registered mark presumed non-functional | Red scales are utilitarian/aesthetically functional (visibility, warning) | Functionality claim fails — no admissible evidence to rebut presumption |
| Likelihood of confusion & bad faith | Products are confusingly similar; B&F copied designs; wilful infringement | Relied on Forschner II; no bad faith | Likelihood of confusion proven; wilful infringement as a matter of law |
| Profits award (deduction of costs) | Award appropriate given defendant failed to prove costs | District court erred by awarding gross revenues without deducting costs | Affirmed — defendant bore burden to prove costs and failed to present admissible evidence |
| Injunction scope | Broad injunction necessary to prevent further infringement | Injunction is overbroad, restricting lawful conduct beyond the litigation | Vacated and remanded in part — injunction must be narrowed to fit specific violations |
| Rule 60(b)(2) newly discovered evidence | Letters show Plaintiffs knew of infringing knives earlier; warrant vacatur | Letters were in defendant’s former counsel files; could have been discovered earlier | Denial of Rule 60 motion affirmed — not justifiable ignorance; no exceptional circumstances |
| Disqualification of Plaintiffs’ counsel | Concurrent representation created conflict; counsel should be disqualified | No actual or apparent conflict; no shared material information; concurrent representation ended | Denial of disqualification affirmed — no present or future conflict shown |
Key Cases Cited
- Lane Capital Mgmt. v. Lane Capital Mgmt., 192 F.3d 337 (2d Cir.) (registration = prima facie evidence of validity and ownership)
- Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 696 F.3d 206 (2d Cir.) (aesthetic functionality and scope of trade dress protection)
- Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir.) (Polaroid factors for likelihood of confusion)
- In re Bose Corp., 580 F.3d 1240 (Fed. Cir.) (high standard for proving fraud in PTO procurement)
- Orient Exp. Trading Co. v. Federated Dep’t Stores, Inc., 842 F.2d 650 (2d Cir.) (materiality and deliberate intent required for fraud on the PTO)
- Guthrie Healthcare Sys. v. ContextMedia, Inc., 826 F.3d 27 (2d Cir.) (application of Polaroid factors and injunction review)
- Hempstead Video, Inc. v. Inc. Village of Valley Stream, 409 F.3d 127 (2d Cir.) (concurrent representation creates prima facie conflict; standards for disqualification)