A blog about patent, copyright and trademark law in the U.S. District Court
for the Southern District of New York

Court Finds Trademark and Trade Dress Infringement; Awards Treble Damages and Attorneys' Fees

In a January 6, 2014 ruling, Judge Harold Baer, Jr. entered judgment in favor of the plaintiffs after a four-day bench trial on the plaintiffs’ trademark and trade dress infringement claim over plaintiff Audemars Piguet Holding S.A.’s well-known octagonal watch design.  The plaintiffs contended that two models of the defendants’ watches infringed their trademarks and trade dress in their “Red Oak” line of watches.  In finding in favor of the plaintiffs, Judge Baer found that “the similarities between these watches remain striking.”

In considering the trade dress claim, the Court wrote that a “plaintiff asserting product design trade dress infringement must prove distinctiveness by showing that ‘“in the minds of the public, the primary significance of [the mark] is to identify the source of the product rather than the product itself” (what is known as ‘acquired distinctiveness’ or ‘secondary meaning’).’”  Judge Baer added that to “determine whether a secondary meaning has attached, the court considers six factors:  ‘(1) advertising expenditures, (2) consumer studies linking the mark to a source, (3) unsolicited media coverage of the product, (4) sales success, (5) attempts to plagiarize the mark, and (6) length and exclusivity of the mark’s use.’”  The Court considered each factor in turn, and found that all but one of them favored the plaintiffs.

Having found that the plaintiffs’ trade dress has secondary meaning, the Court conducted a similar analysis to determine whether there was a likelihood of confusion between the plaintiffs’ and the defendants’ watches, using the well-known eight factor Polaroid test.  Finding that four of the factors favored the plaintiffs, the Court concluded that the defendants’ “use of the allegedly infringing designs is likely to cause customer confusion.”

Lastly with regard to infringement, Judge Baer considered the defendants’ contention that the plaintiffs’ trade dress was functional “because an octagon is one of only a limited number of shapes available for a watch.”  The Court rejected that argument, finding that “the trademark here does not protect that octagon shape standing alone; rather the combination of that shape with the eight screws spaced around the bezel is protected.”  The Court also found that the plaintiffs’ trade dress is not “aesthetically functional” (where giving the markholder exclusive rights to the design “would put competitors at a significant non-reputation-related disadvantage”), because “there is no support for the idea that protecting this mark will hinder competition,” especially since 98% of the defendants’ “sales are of watches that do not bear the marks at issue.”

The Court next considered and rejected the defendants’ various affirmative defenses and counterclaims to cancel the marks at issue, and came to the issue of remedies.  Judge Baer entered a permanent injunction, and damages in the amount of $3,257,739.82, which the Court trebled (and awarded attorneys’ fees).  In determining the amount of damages, the Court ruled that the plaintiffs’ recovery for trademark infringement was limited by their failure to mark their goods so as to give notice of their registered trademarks and trade dress.  Judge Baer then held, however, that damages for counterfeiting were not so limited, and awarded the plaintiffs their full damages.
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