Coach narrowly alleges grounds for cancellation of similar marks

Tapestry,
Inc. v. Chunma USA, Inc., 2021 WL 1534988, No. 20-CV-0271 (JMF) (S.D.N.Y. Apr.
19, 2021)

Tapestry
(Coach) sued Chunma for trademark infringement, false designation of origin,
false advertising, and cancellation of Chunma’s registered trademarks under the
Lanham Act, unfair competition and trademark infringement under New York state
common law; and injury to business reputation under New York’s GBL, based on
Chunma’s products bearing logos that allegedly infringe upon Coach’s
trademarks, including Coach’s well-known “Signature C” mark. Chunma’s motion to
dismiss the cancellation claims was denied.  

The claim
for cancellation of the ‘675 Mark was based on fraud in obtaining the trademark
registration and misrepresentation of source, whereas their claim for
cancellation of the ’549 and ’077 Marks was based on misrepresentation of
source alone.

077

549

675

For
fraud, Coach alleged that Chunma made a material misrepresentation in its
trademark registration application, in particular that the mark was in use as
of the application date, when in fact there was no bona fide use until years
later. Chunma also allegedly misrepresented the specimen that it submitted
alongside its application as a “SCANNED ACTUAL TAG” when, in fact, it was
merely a “computer illustration, digital image, or similar mockup” that the PTO
would not have accepted.

As for
false suggestion of a connection, Coach explicitly alleged that Chunma’s marks
“falsely suggest a connection with Plaintiffs.”

However,
with respect to the ’549 and ’077 Marks, the misrepresentation of source claim
was “a close question.”  “[I]t is well
established that “allegations … of the type that typically support a claim of
likelihood of confusion under Section 2(d)” do not suffice to state a claim for
cancellation of an incontestable mark based on misrepresentation of source
under Section 14(3).” (I note that, looking at TSDR, Coach requested an
extension of time to oppose at least one of these marks, but does not seem to
have actually opposed them.) “Significantly, even intentional copying of a
plaintiff’s trademark does not, standing alone, state a misrepresentation
claim.” Instead, a plaintiff must plead “specific facts reflecting [the
defendant’s] activity that, if proved, would amount to an attempt to create the
impression that [the plaintiff] is the source of [the defendant’s] services” or
goods, such as conduct outside use of the registered mark itself.

The
complaint did “narrowly” state a claim. Coach pled that Chunma sells “products
bearing logos and source-identifying indicia and design elements that are
studied imitations of [Plaintiffs’ well-known] Signature C Mark,” with
“reckless disregard or willful blindness to Plaintiffs’ rights, and/or with bad
faith, for the purpose of trading on the goodwill and reputation of the
Signature C Mark” and to “deceive consumers, the public, and the trade into
believing that there is a connection or association between [Chunma] … and
[the] Coach” brand. The complaint also showed images showing close similarities
between Coach’s trademarks and some of Chunma’s products. Viewed in the light
most favorable to plaintiffs, that sufficed for now, though Coach would “ultimately
bear a heavy burden to prove this claim by clear and convincing evidence.”

accused product

another

another

The
subsequent stipulation to a permanent injunction did not cover the
registrations, but there is apparently a confidential settlement agreement that
may have covered them.

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