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Luxottica Group S.p.A. v. Li

United States District Court, N.D. Illinois, Eastern Division

February 15, 2017

Luxottica Group S.p.A. and Oakley, Inc., Plaintiffs,
v.
Hao Li, et al., Defendants. and Richemont International SA, Cartier International A.G., Montblanc-Simplo GMBH, Chloe S.A.S., Van Cleef & Arpels SA, Officine Panerai A.G., and Lancel International SA, Plaintiffs,
v.
Luo Liang,, Defendants.

          MEMORANDUM OPINION AND ORDER

          Manish S. Shah, United States District Judge

         Defendant operates the internet stores dealsgoing, sfcdirect, and uptogethertek, through which it sold sunglasses using counterfeit trademarks owned by plaintiffs Luxottica Group S.p.A. and Oakley, Inc. It also operates the internet store royalwaytrade, through which it sold earrings bearing counterfeit trademarks owned by plaintiff Van Cleef & Arpels SA. Plaintiffs Luxottica and Oakley filed suit against defendant under docket number 16-cv-487. Plaintiff Van Cleef & Arpels filed suit against defendant under docket number 16-cv-1227. Both cases involve claims under the Lanham Act and the Illinois Uniform Deceptive Trade Practices Act, and both are litigated by the same counsel. And in both, plaintiffs now move for summary judgment and seek an award of reasonable attorney's fees and costs, at least $90, 000 in statutory damages each, and a permanent injunction prohibiting defendant from selling counterfeit products bearing the infringed-upon trademarks. The arguments presented in each motion overlap significantly, so the two motions will be addressed together. For the following reasons, both motions for summary judgment are granted in favor of plaintiffs, permanent injunctions shall be entered, and in each case, statutory damages shall be awarded in the amount of $60, 000, along with reasonable attorney's fees and costs.

         I. Legal Standards

         Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A genuine dispute as to any material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A court must “construe all facts and reasonable inferences in the light most favorable to the non-moving party.” Apex Digital, Inc. v. Sears, Roebuck, & Co., 735 F.3d 962, 965 (7th Cir. 2013).

         II. Background

         Plaintiffs Luxottica Group S.p.A. and Oakley, Inc. own a valid and incontestable trademark in the word “Wayfarer, ” registered with the United States Patent and Trademark Office under the number 595, 513.[1] 1:16-cv-487, [85] ¶ 1.[2]Defendant operates multiple internet stores set in eBay's online marketplace. 1:16-cv-487, [85] ¶ 6. Defendant advertised and sold sunglasses that it described in its product listings as “Vintage 1980's Wayfarer Fashion Sunglasses Dark Lens Black Frame Unisex, ” “Fashion Sunglasses Wayfarer Style Black Frame w/ Dark Lens Retro Square Glasses, ” and “Vintage 1980's Wayfarer Fashion Sunglasses Dark Lens Black Frame Mens Womens, ” using the eBay seller IDs dealsgoing, sfcdirect, and uptogethertek, respectively. 1:16-cv-487, [85] ¶¶ 2-4. Defendant listed the sunglasses for a few dollars each, and offered to sell and ship the sunglasses to potential customers throughout the United States, including Illinois. 1:16-cv-487, [85] ¶¶ 2-4. Luxottica had not authorized or licensed defendant to use its Wayfarer trademark. 1:16-cv-487, [85] ¶ 5.

         Plaintiff Van Cleef & Arpels SA holds valid trademarks in a four-leaf-clover design, known as the Alhambra trademarks and registered with the United States Patent and Trademark Office under the numbers 4, 037, 174 and 4, 653, 258. 1:16-cv-1227, [59] ¶ 1. Defendant operates the eBay online marketplace account royalwaytrade. 1:16-cv-1227, [59] ¶ 3. Through that store, defendant offered for sale and sold earrings that it described as “2x 1 Black Four Leaf Clover White Pearl Stud Earrings Ear Studs, ” but which bore counterfeit versions of the Alhambra trademarks. Plaintiff had not authorized or licensed defendant to use its trademarks. 1:16-cv-1227, [59] ¶ 3. Defendant listed the earrings for $6.05 CAD (but said it also accepted payment in U.S. dollars), and offered to sell and ship the earrings to potential customers throughout the United States, including Illinois. 1:16-cv-1227, [59] ¶¶ 2, 4.

         Defendant sold the sunglasses and earrings despite having some procedures in place designed to avoid listing or selling infringing products. 1:16-cv-487, [87] ¶ 8; 1:16-cv-1227, [62] ¶ 6. For example, defendant sells only unbranded merchandise, and employees are instructed to cross-reference product listings against an internal trademark database, as well as trademark databases maintained by the United States Patent and Trademark Office and others. 1:16-cv-487, [87] ¶ 8; 1:16-cv-487, [84-1] ¶¶ 3-4; 1:16-cv-1227, [62] ¶ 6; 1:16-cv-1227, [58-1] ¶¶ 3-4. If an item is found to be potentially infringing, or if complaints of infringement are received, the item is delisted. 1:16-cv-487, [84-1] ¶ 5; 1:16-cv-1227, [58-1] ¶ 5. Upon receiving notice of these lawsuits, defendant immediately removed the product listings at issue. 1:16-cv-487, [87] ¶ 10; 1:16-cv-1227, [62] ¶ 8.

         III. Analysis

         A. Summary Judgment

         In both cases, plaintiffs seek summary judgment on their federal claims of trademark infringement and counterfeiting under 15 U.S.C. § 1114 and false designation of origin under 15 U.S.C. § 1125(a), and their Illinois claim, based on the same conduct, under the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS § 510/1 et seq. To succeed on those claims, plaintiffs must show that the trademarks are protectable and that defendant's unauthorized use creates a likelihood of confusion among consumers as to the source, affiliation, connection, or sponsorship of defendant's products. CAE, Inc. v. Clean Air Eng'g, Inc., 267 F.3d 660, 673-74 (7th Cir. 2001); Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 957 (7th Cir. 1992) (“The ‘keystone' of trademark infringement is ‘likelihood of confusion' as to source, affiliation, connection or sponsorship of goods or services among the relevant class of customers and potential customers.”). That standard applies to both the federal trademark claims and the state-law claims. See Schutt Mfg. Co. v. Riddell, Inc., 673 F.2d 202, 207 (7th Cir. 1982); Tarin v. Pellonari, 253 Ill.App.3d 542, 551 (1st Dist. 1993).

         1. The Wayfarer Trademark

         Defendant concedes that the Wayfarer trademark is valid and incontestable, that Luxottica has the exclusive right to use the trademark in commerce, and that defendant used it without authorization to sell its goods. Defendant does not respond to Luxottica's assessment of the likelihood of confusion, but because defendant does dispute liability, this element will be briefly addressed. Courts employ a seven-factor test to determine likelihood of confusion: “(1) the similarity between the marks in appearance and suggestion; (2) the similarity of the products; (3) the area and manner of concurrent use; (4) the degree of care likely to be exercised by consumers; (5) the strength of the plaintiff's mark; (6) any evidence of actual confusion; and (7) the intent of the defendant to ‘palm off' his product as that of another.” Sorensen v. WD-40 Co., 792 F.3d 712, 726 (7th Cir. 2015), cert. denied, 136 S.Ct. 801 (2016). No single factor is dispositive, but factors (1), (6), and (7) are especially important. Id. Whether likelihood of confusion exists is generally a question of fact, but may be resolved on summary judgment “if the evidence is so one-sided that there can be no doubt about how the question should be answered.” CAE, 267 F.3d at 677 (quoting Door Sys., Inc. v. Pro-Line Door Sys., Inc., 83 F.3d 169, 173 (7th Cir.1996)). Luxottica provides sufficient evidence to clear that bar, leaving no doubt that a likelihood of confusion exists among consumers.

         For example, Luxottica submits evidence showing that defendant used an identical mark in connection with the same type of product (sunglasses). Given that defendant placed the mark in the title of the product listing, where a consumer might expect to find a brand name, consumers would be likely to attribute both defendant's products and genuine Luxottica products to the same source. Luxottica also provides evidence that both it and defendant sell their products online and to the same general audience (those who search for sunglasses online), who do not have the ability to inspect the physical products before purchase. This supports a finding that there is a likelihood of confusion, because “[t]he more widely accessible and inexpensive the products and services, the more likely that consumers will exercise a lesser degree of care and discrimination in their purchases.” Sorensen, 792 F.3d at 730 (quoting CAE, 267 F.3d at 683)). And Luxottica submits evidence, including articles and advertisements from various news and fashion publications, that the Wayfarer brand is well-known and well-regarded, which is relevant to the fifth factor ...


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