MEMORANDUM OPINON AND ORDER
On March 11, 2005, plaintiffs Cartier, a division of Richemont North America, Inc., and Cartier International, B.V. (collectively “Cartier” or “plaintiffs”) initiated litigation against defendants Symbolix, Inc., d/b/a Park Cities Jewelers, its principal, Ahmed M. Saleh, and John Does 1-5 (collectively “defendants”), alleging trademark infringement and false designation of origin under § 32(1) and § 43(a)(1) of the Lanham Act, 15 U.S.C. 1114(1) and 1125(a)(1) respectively. These claims relate to Cartier’s Tank Frangaise line of watches. On April 5, 2005, plaintiffs moved for a preliminary injunction preventing defendants from modifying stainless steel Tank Frangaise watches by mounting diamonds on the bezels and cases, applying polish to the watch in order to simulate Cartier’s more expensive white gold Tank Frangaise watches, and thereafter selling the modified watches. On June 1, 2005, the Court granted a preliminary injunction to prevent defendant from altering and selling watches. Cartier now has moved for partial summary judgment with respect to liability on its federal trademark infringement claims and seeks to permanently enjoin defendants from altering and selling Cartier watches.
*178 For the reasons set forth above, the Court grants plaintiffs’ motion for partial summary judgment [22] and enters a permanent injunction against defendants.
BACKGROUND
Unless otherwise indicated, the following facts are undisputed and taken in the light most favorable to defendants.
Cartier has been developing, marketing, and selling luxury watches in the United States for nearly a century. (Destino Deck ¶ 3.) Cartier owns the word mark CARTIER and deploys the mark on both its watch and jewelry products. (Id. ¶ 4; Exs. A, B.)
Park Cities Jewelers sells various luxury brands, including used but unworn Cartier watches. (Saleh Aff. ¶ 5) 1 Saleh is the manager and owner of Symbolix Inc., which does business as Park Cities Jewelers. (Id. ¶ 1.) Park Cities Jewelers is not an authorized Cartier dealer. (Defs. 56.1 Statement ¶ 17.)
In December of 2004, Cartier deployed a private investigator, Kathy Braunstein, to conduct an investigation into Park Cities Jewelers. (Braunstein Deck ¶ 1; Defs. Mot. in Opp’n to Pis. Mot. for Partial Summ. J. and Permanent Inj. (“Defs.Opp’n”) ¶ 2.) On December 13, 2004, Braunstein spoke to Saleh over the phone and expressed an interest in purchasing “a watch with diamonds on the bezel and case.” (Braunstein Deck ¶¶ 2, 3; Defs. Opp’n 2.) 2 Braunstein asserts that when she asked about a ladies’ Cartier watch, Saleh responded that he could sell her a brand new Cartier Tank Frangaise stainless steel model and add diamonds on the bezel and case for $6,000 (Braunstein Deck ¶¶ 2, 3); defendants claim that Braunstein was the first to bring up the possibility of adding diamonds to a stainless steel model (Defs. Opp’n 2-3). Saleh indicated that it would be possible to add diamonds to the stainless steel model. (Saleh Aff. ¶ 14; Defs. Opp’n 3.) By comparison, Saleh said, a genuine Cartier Tank Frangaise watch with diamonds would cost $14,500. (Braunstein Deck ¶¶ 2, 3.) Saleh also indicated that such diamonds would be “aftermarket diamonds” and that the work would be unauthorized by Cartier and void the warranty. (Saleh Aff. ¶ 14.) Although Braunstein and Saleh did not finalize the terms of the deal, Braunstein called back on December 16, 2004 and discussed the purchase of a small-size, stainless steel, ladies’ Cartier Tank Frangaise watch, with diamonds added to the bezel and case for $5,750 without any sales tax. (Braunstein Deck ¶ 5.) Saleh informed her that the work on the watch would take about one week at the longest and would be accompanied by a two-year Park Cities Jewelers’ warranty. (Braunstein Deck ¶ 5.)
On January 4, 2005, Braunstein called Saleh again regarding the Cartier Tank Frangaise watch. (Braunstein Reply Deck ¶ 3.) Braunstein told Saleh that Cartier did not manufacture the Cartier Tank Fran-gaise watch in stainless steel with diamonds and that others viewing the watch might regard it as a fake. (Id. ¶ 4.) Saleh responded that the Cartier Tank Frangaise model is made with stainless steel or white gold, but that diamonds are only placed by Cartier on the white gold model. (Id.) However, he reassured her that they “polished” the stainless steel to make it appear like “white gold; it looks exactly the same. They are exactly identical.” (Id.) Saleh further stated that he had placed a picture *179 of the Cartier Tank Frangaise watch in stainless steel with diamonds in a recent advertisement in a Dallas newspaper around October or November of 2004 and that one could not tell the difference between the two watches. (Id. ¶ 6.) Defendants do not dispute that the watch pictured in the advertisement was an altered Cartier watch. (Defs. Opp’n 18.)
Thereafter, Vanessa Halvorsen, an administrative assistant employed at plaintiffs law firm, posed as a relative of Braunstein and contacted Saleh, who transferred her call to another employee named Reza on January 20, 2005. (Hal-vorsen Deck ¶¶ 2-4.) Halvorsen told Reza she wanted to purchase a stainless steel Cartier Tank Frangaise watch with diamonds. (Id. ¶ 4.) Halvorsen faxed her personal information including her credit card information and driver’s license. (Id. ¶ 4.) Defendants then purchased an unworn stainless steel Cartier watch from International Watch Company, located in Miami; the watch did not, at that time, contain diamonds. (Saleh Dep. Tr. 25, 48; see also Defs. Opp’n 3.) At this point, Halvorsen had paid for the watch and the transaction was nonrefundable. (Saleh Aff. 10.) Defendants shipped the watch to America’s Diamonds, located in Los Angeles, and requested that the watch be polished and encrusted with diamonds. (Saleh Dep. Tr. 48, 56.) America’s Diamonds placed diamonds on the watch, polished the watch, and sent it back to defendants in Dallas. (Id. at 50.) Defendants then shipped the watch without an accompanying Park Cities Jewelers’ receipt to Halvorsen. (Hal-vorsen Deck ¶ 5.)
Ralph Destino, Chairman Emeritus of Cartier, inspected the watch received by Halvorsen and noted the “marked inferiority in the aesthetic appearance as compared to comparable genuine diamond-set Cartier watches.” (Destino Deck ¶ 8.) According to Destino, Cartier does not set diamonds on its stainless steel watches but rather exclusively places them on the higher-end white and yellow gold watches, including gold watches in the Cartier Tank Frangaise line. (Id.) In Destino’s opinion, the “combination of diamonds with stainless steel is not one offered or sold by Cartier; such a combination of a relatively inexpensive metal with expensive diamonds, appears incongruous and is certainly an aesthetically different watch from those sold and promoted by Cartier.” (Id.) Moreover,, he discerned that “the setting of the diamonds was done in a sloppy manner, resulting in a cheap, shoddy looking item.” (Id.)
Saleh has also admitted that Park Cities Jewelers added diamonds and polished at least two stainless steel Tank Frangaise watches. (Saleh Dep. Tr. 16-17.)
On February 24, 2005, plaintiffs sent defendants a letter a “cease and desist” letter demanding that defendants discontinue the advertising, promotion and sale of any altered Cartier watches. (Springut Deck, Ex. A.) By letter dated March 4, 2005, defendants’ counsel responded, representing that while defendants purchase diamond-encrusted watches from various sources that may be factory originals or “aftermarket,” defendants do “not alter, add, modify or recondition timepieces.” (Id., Ex. C.) This denial was flatly contradicted by Saleh’s subsequent deposition testimony. (Saleh Dep. Tr. at 16-17.) On April 5, 2005, plaintiffs moved by ex parte order to show cause why a preliminary injunction enjoining defendants from their infringing activities should not be entered before this Court. That same day, the Court granted the order to show cause. The Court subsequently heard oral argument on plaintiffs’ motion for a preliminary injunction on April 21, 2005.
On June 1, 2005, the Court granted plaintiffs’ motion for a preliminary injunc
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tion, enjoining defendants from altering and selling Cartier watches.
Cartier v. Symbolix,
DISCUSSION
1. Summary Judgment Standard
Summary judgment is appropriate when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). Of course, a “mere existence of
some
alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no
genuine
issue of
material
fact.”
Anderson v. Liberty Lobby, Inc.,
On a motion for summary judgment, the Court is required to view the facts in the light most favorable to the nonmoving party and to make all reasonable inferences in this party’s favor.
E.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
2. Trademark Infringement
Section 32 provides that:
Any person who shall, without the consent of the registrant—
(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive ...
shall be liable in a civil action by the registrant for the remedies hereinafter provided.
15 U.S.C. § 1114(1)(a). Section 43(a) of the Act creates a cause of action against any person who misuses a mark in a manner that is likely to cause confusion, and extends this protection to unregistered *181 marks as well as registered marks and to “any false designation or origin”:
Any person who, on or in connection with any goods or services ... uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, ... which—
(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, ...
shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1). “For both Lan-ham Act claims, [the plaintiff] must demonstrate (1) that it has a valid mark that is entitled to protection under the Act and (2) that [the defendant’s] actions are likely to cause confusion as to the origin of the mark.”
Gucci Am., Inc. v. Duty Free Apparel, Ltd.,
Cartier owns U.S. Trademark Registration 759,201 for the word mark CARTIER for watches and clocks.
(See
Destino Decl. Ex. A.) This mark has become incontestable.
See Gruner
+
Jahr USA Publ’g v. Meredith Corp.,
Defendants are correct in noting that Cartier has failed to establish actual confusion. Defendants’ customers knew that they were receiving watches that resembled, but were not in fact, the more expensive model. Defendant thus argues that plaintiffs have failed to offer “any admissible evidence of such confusion” because they rely “solely on ‘what if scenarios.” Cartier is correct, however, that to receive permanent injunctive relief, it need only prove a
likelihood
of confusion; a plaintiff need prove “actual consumer confusion or deception resulting from the violation” only for the recovery of money damages, which Cartier is not seeking in this motion.
A.V. by Versace, Inc. v. Gianni Versace S.p.A.,
No. 96 Civ. 9721(PKL)(THK),
In determining the likelihood of confusion, the Court looks to the factors established in
Polaroid Corp. v. Polarad Electronics Corp.,
(1) the strength of the mark; (2) the degree of similarity between the two marks; (3) the proximity of the products; (4) the likelihood of the products; (4) the likelihood that the prior owner will “bridge the gap” ...; (5) actual confusion; (6) the defendant’s good faith in adopting its mark; (7) the quality of the defendant’s product; and (8) the sophistication of the buyers.
Arrow Fastener Co., Inc. v. Stanley Works,
Before applying these elements to the facts at hand, it is useful to distinguish between the two types of infringement al *182 leged in this case. This distinction is best drawn by considering the two different types of transaction at issue in this case. First, Saleh has admitted that Park Cities Jewelers added diamonds to the bezel and polished at least two stainless steel Tank Frangaise watches that it did not purchase, but instead were brought by customers requesting such modifications. Second, Saleh concedes that he purchased a stainless steel Tank Frangaise watch on Hal-vorsen’s behalf and then, as part of the same transaction, polished the watch and added diamonds to the bezel before delivering the watch to her. Defendants attempt to argue that these transactions are indistinguishable because, in both cases, the modifications were made at the customers’ request. However, the first transaction, taken as a whole, differs from second in that modification alone does not compete directly with the sale of new, white gold, diamond-encrusted Tank Fran-gaise watches. Because these two situations present somewhat different issues of law, they are treated separately below.
a. Sale and Modification of Watch as Part of Same Transaction
In the second transaction, in which Halvorsen paid for a new stainless steel watch and requested its modification as part of the same transaction, the watch delivered to her at the conclusion of the transaction resembled a new, white gold, diamond-encrusted Tank Frangaise watch. Indeed, the entire purpose of the modification was to make the stainless steel Tank Frangaise watch resemble the diamond-encrusted, white gold Tank Frangaise watch.
(See
Pis. 56.1 Statement ¶ 9; Defs. 56.1 Statement ¶ 9.) “The unauthorized use of an original label” in connection with the same goods as those for which the mark is registered is sufficient to state a claim of counterfeiting. 4 McCarthy on Trademarks and Unfair Competition 25:15 (4th ed.2006). Thus, although defendants did not imitate, copy, or reproduce Cartier’s mark, but merely retained the mark on the watch, the watch delivered to Halvorsen was a counterfeit good.
See Cartier v. Aaron Faber, Inc.,
Because the Court finds that the watch delivered to Halvorsen was a counterfeit, “the Court need not undertake a factor-by-factor analysis under
Polaroid
because counterfeits, by their very nature, cause confusion.”
Gucci,
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Defendants also argue that “Cartier watches are very expensive.... Customers of this type of product are generally sophisticated. Given the discerning nature of Cartier’s potential customers, it is unlikely that a casual observer will be confused as to the source of the goods.” (Defs. Opp’n 12 (internal citations omitted).) This argument contradicts defendants’ statement to Halvorsen that the two watches look “exactly the same” (Braun-stein Reply Decl. ¶ 4), but even if true, the fact remains that the defendants’ watch is a counterfeit. In addition, the “likelihood of confusion test concerns not only potential purchasers but also the general public.”
Landscape Forms, Inc. v. Columbia Cascade Co.,
Finally, defendants argue that, notwithstanding the underlying merits of plaintiffs’ claims, the Court should deny injunctive relief because plaintiffs’ use of an undercover investigator demonstrates Cartier’s “consent” to any alleged infringement. Defendants cite no authority for this proposition, asserting merely that “[t]he only reason that the Sample' Watch was modified was because Cartier’s representatives requested and insisted on it.”
3
(Def.Br.20.) The Court rejects this argument. Undercover investigators are “an effective enforcement mechanism for detecting and proving anti-competitive activity which might otherwise escape discovery or proof.”
Gidatex, S.r.L. v. Campaniello Imports, Ltd.,
b. Modification of Pre-Owned Watches
Defendants also admit to polishing and adding diamonds to at least two stainless steel Tank Frangaise watches at the request of customers who had previously purchased the watches. Defendants are correct in pointing out that courts have rejected Lanham Act violations where defendants merely repair or restore a trade
*184
marked item.
See, e.g., U.S. Surgical Corp. v. Orris, Inc.,
Under 15 U.S.C. § 1127, a mark is in “use in commerce” when (1) the mark has been placed on the goods or their containers, labels, or the documents associated with the goods or their sale, and (2) the goods are “sold or transported in commerce.” The Second Circuit has said that the “history and text of the Lanham Act show that ‘use in commerce’ reflects Congress’s intent to legislate to the limits of its authority under the Commerce Clause, rather than to limit the Lanham Act to profit-seeking uses of a trademark.”
United We Stand Am., Inc. v. United We Stand, Am. N.Y., Inc.,
In Storz, the Ninth Circuit considered whether a repair company that rebuilt Storz endoscopes on behalf of hospitals that owned the endoscopes was using Storz’s trademark in commerce. The Ninth Circuit suggested a number of factors to consider in determining whether a modification results in a different product:
Those factors include the nature and extent of the alterations, the nature of the device and how it is designed (whether some components have a shorter useful life than the whole), whether a market has developed for service and spare parts, and, most importantly, whether end users of the product are likely to be misled as to the party responsible for the composition of the product.
*185
Id.
at 857-58 (citing
see Rolex Watch, U.S.A., Inc. v. Michel Co.,
Applying these factors to the instant case, the Court finds that defendants’ modifications are not “use in commerce” and thus fall outside the scope of the Lan-ham Act. Unlike the defendants in
Storz,
defendants here are not “discarding] every important part” and retaining only the portion of the product that bears the trademark; the components of the stainless steel Cartier watch are still incorporated in the final product. It is true that people viewing the modified watch are likely to be misled as to whether it is a genuine Cartier diamond watch (or at least the customer hopes that they will be), but these downstream viewers do not rely on the Cartier trademark in the same way that the surgeons using an endoscope relied on the representation that it was a genuine “Storz” endoscope.
Id.
at 856 (“A mere repair for an owner’s personal use must be contrasted with a complete rebuild where the rebuilt product will be used by a third party ....”);
see also Champion Spark Plug v. Sanders,
c. Defendants’Advertisements
Cartier also argues that defendants’ use of an altered Cartier watch in its advertisements creates initial interest confusion. This type of confusion occurs where “potential consumers initially are attracted to the junior user’s mark by virtue of its similarity to the senior user’s mark, even though these consumers are not actually confused at the time of purchase.”
Jordache Enterprises, Inc. v. Levi Strauss & Co.,
Notably, defendants’ newspaper advertisements did not disclose that the watch pictured was not an authentic diamond-encrusted Tank Frangaise watch. A would-be purchaser reviewing the advertisement would reasonably believe that defendants were offering a genuine Cartier item. Only when the customer called or
*186
visited the store would the customer discover that the watch was counterfeit. Thus, defendants’ use of Cartier’s trademark in defendants’ advertisements helps defendants gain “crucial credibility during the initial phases of a deal.”
Mobil Oil,
3. Permanent Injunction
The standard for a permanent injunction is straightforward: To obtain a permanent injunction, Cartier “must demonstrate (1) actual success on the merits and (2) irreparable harm.”
Gucci,
Accordingly, the Court grants Cartier’s motion for a permanent injunction against defendants. Defendants are permanently enjoined from marketing new or used Cartier watches that defendants have caused to be altered “in such a way as to deceive the general public as to the origin of the watch’s craftsmanship.”
Aaron Faber,
CONCLUSION
For the reasons set forth above, the Court grants plaintiffs’ motion [22] for partial summary judgment with respect to liability on its federal trademark infringement claims and grants plaintiffs’ motion for a permanent injunction in the form contained herein:
1. Subject to the provisions set forth in Paragraphs 2 and 3 hereof, Defendants Symbolix, Inc. and Ahmed M. Saleh (“Defendants”), their officers, agents, servants, employees, and attorneys, and all persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise are enjoined from altering, modifying, or causing to be altered or modified any “Cartier” watches, or selling, offering for sale, advertising, or distributing any “Cartier” watches that have in any way been altered or modified by any person or entity not authorized to do so by plaintiffs Cartier International, B.V. or Cartier, division of Richemont North America, Inc., including any such watches that have been modified by the setting of diamonds thereon by any person or entity not authorized by Plaintiffs.
2. Engravings and other minor modifications that do not deceive the general public as to the origin of the watch’s craftsmanship shall not constitute “altered or modified” for the purpose of this permanent injunction.
3. Nothing in the foregoing injunction shall prevent Defendants from providing aftermarket services including modifications and alterations to any customer who already owns a Cartier watch and who without solicitation requests service thereof where such service terminates in return of the watch to the same customer upon completion of such service.
SO ORDERED.
Notes
. Defendants nevertheless assert that they do not sell new watches. (Saleh Aff. ¶ 4.)
. Saleh does not contest that he discussed the sale of a watch with Braunstein but claims that he does not recall any specific details about the conversation. (Saleh Dep. Tr. at 46-7.)
. Of course, Defendants cannot and do not argue that the newspaper advertisement depicting a counterfeit Cartier watch was created at the behest of the Plaintiffs. Therefore, this consent argument, even if accepted, is fundamentally incomplete in that Plaintiffs could not possibly have consented to all of the infringing behavior at issue in this case.
. Defendants also raise the "unclean hands” defense rejected by this Court in its decision granting plaintiffs a preliminary injunction.
See Symbolix,