Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 1 of 13. -against- : REPORT AND RECOMMENDATION URSA PHILBIN, et al., : Defendants.

Transcription

1 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 1 of 13 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK X TIME SQUARE FOODS IMPORTS LLC, : Plaintiff, : 12 Civ (PAE)(HBP) -against- : REPORT AND RECOMMENDATION URSA PHILBIN, et al., : Defendants. : X PITMAN, United States Magistrate Judge: District Judge, TO THE HONORABLE PAUL A. ENGELMAYER, United States I. Introduction By notice of motion dated August 19, 2013 (Docket Item 20), plaintiff and counterclaim defendants move to vacate the conditional Order of dismissal entered in this matter on July 18, 2013 (Docket Item 17), to restore this matter to the Court's docket and to execute the consent judgment called for by the settlement agreement the parties entered on the record June 7, For the reasons set forth below, I respectfully recommend that plaintiff's motion be granted.

2 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 2 of 13 II. Facts Plaintiff commenced this action on December 12, 2012, alleging that it was (1) the exclusive licensee of the trademark MY SKINNY, and the owner of the trademark MY SKINNY RICE with respect to food intended for human consumption and (2) the owner of the marks MY SKINNY PETS and MY SKINNY PET TREATS with respect to food intended for animal consumption and that defendants were using the marks without authorization, resulting in the infringement and dilution of the marks. Plaintiff alleged that it had the right to use the marks as a result of a license it had obtained from a British corporation named Eximp Ltd. ("Eximp"), which had been assigned the marks from their owner, My Skinny Group Ltd. ("MSG-UK"). Defendant Philbin filed a counterclaim against plaintiff and others alleging that she was a minority shareholder in Eximp and MSG-UK and that plaintiff's license was issued in violation of an agreement among the shareholders in those two entities and was, therefore, invalid. Philbin purported to assert the claims against plaintiff and the other counterclaim defendants derivatively, on behalf of both Eximp and MSG-UK. In addition to asserting these claims as counterclaims in this action, Philbin asserted them in two separate state court actions 2

3 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 3 of 13 in New York Supreme Court, New York County, entitled Philbin v. Seena Foods, Ltd., et al., Index No /2012, and Philbin v. Verma, et al., Index No /2012. There was also an administrative action between the factions. Defendant Kalliongis applied to register the trademark SKINNY PETS in the United States Patent and Trademark Office. Plaintiff and Eximp claimed senior rights in the trademark and filed an opposition to the registration in the Trademark Trial and Appeals Board. The Honorable Paul A. Engelmayer, United States District Judge, referred this matter to conduct a settlement conference on April 22, 2013 (Docket Item 8), and I convened that conference on June 7, The settlement conference was successful, resolved all four actions among the parties and resulted in a settlement with multiple terms, most of which are not now in dispute. The principal terms of the settlement ceded to plaintiffs any rights the defendants had in the marks identified above and any confusingly similar marks in return for plaintiff's payment of $100,000. The sole dispute among the parties is whether the settlement precludes defendants' use of the mark SKINNY with respect to food products intended for human consumption. 3

4 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 4 of 13 At the conclusion of the settlement conference, the parties agreed to put the settlement on the record. The colloquy pertinent to the parties' dispute is as follows: THE COURT: [PLAINTIFF's COUNSEL]: At this time I'm going to ask [plaintiff's counsel] to state the material terms of the agreement and then I'll ask [defendants' counsel] if the material terms have been stated correctly. The record should also reflect that both Mr. Dahl on behalf of the plaintiff and Ms. Philbin on behalf of the counter claimant -- of the defendants and counter [claim] plaintiffs are present in the courtroom at this time.... Yes, Your Honor. Thank you. The material terms of the settlement are numerous. Number one, in the present action defendants consent to having a permanent injunction entered against them in the usual form of a permanent injunction in a trademark action permanently enjoining them from using the disputed marks and anything confusingly similar. That injunction will run against all defendants. * * * Ms. Philbin also agrees to assign and to transfer to plaintiff Times Square Foods LLC and/or its designee ay rights, interest or property that she might have in or relating to the My Skinny trademark and any of the disputed trademarks including all trademarks confusingly similar to that. In addition to that, that agreement also to 4

5 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 5 of 13 assign also applies to defendants Kalliongis and Comnexis. In addition to that Ms. Philbin and defendants Kalliongis and Comnexis agree to transfer to Times Square Food all rights to and all control of any matters concerning websites, domains, advertisements, Facebook pages and all similar advertisements and all similar media functions relating to My Skinny, Skinny Pets or any related trademark. * * * Further, all obligations by Ms. Philbin, by Mr. Kalliongis and Comnexis to assign and transfer and waive their right to the above mentioned trademarks includes not only My Skinny and My Skinny rights and all confusingly similar related trademarks but also expressly includes without limitation the Skinny Pets and My Skinny Pets trademarks and all marks confusingly similar thereto. * * * (Transcript of Proceedings, June 7, 2013 (Docket Item 18) ("Tr.") at 2-3, 5, 6 (emphasis added)). Defense counsel then offered some clarifying comments concerning the releases contemplated by the settlement and the monetary penalty to be assessed if the payments required by the settlement were not made in a timely manner (Tr. at 6-7). Nothing in that discussion related to the scope of the injunction to which defendants were agreeing. The colloquy then continued: 5

6 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 6 of 13 [Plaintiff's Counsel:] [Defendants' Counsel:] [Plaintiff's Counsel:] MS. PHILBIN: [Plaintiff's Counsel:] [Defendants' Counsel:] With those revisions, Mr. Lebowitz, did I accurately state the terms of our agreement? I believe so. Ms. Philbin, present in court, do you agree to that settlement? I agree. Mr. Lebowitz as counsel for all defendants, do you so agree? I think we stated everything on the record. We're not here to cross-examine anyone. (Tr. at 8-9). After the settlement conference, the parties exchanged drafts of a consent judgment and injunction. Paragraph 7 of the final draft underlies the present dispute; it provides: 7. Effective immediately, the defendants URSA PHILBIN, NICKY KALLIONGIS, and COMNEXIS, INC., together with their respective officers, agents, servants, employees and attorneys, and all persons in active concert or participation with one or more of them, are permanently enjoined and restrained from: a. infringing, diluting the distinctiveness of, and/or falsely designating the origin of goods under the trademark and/or trade name MY SKINNY - and under all trademarks and/or trade names confusingly similar thereto including without limitation SKINNY, MY SKINNY, SKINNY RICE, MY SKINNY RICE, SKINNY PETS, MY SKINNY PETS, SKINNY PET TREATS, MY SKINNY PET TREATS - in connection with the sale, offering for sale, distribution, marketing, display, promotion and/or advertisement of foods intended for consumption by humans and/or pets; and from: 6

7 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 7 of 13 b. using, employing, publishing and/or claiming rights to the trademark and/or trade name MY SKINNY - and to any or all trademarks and trade names confusingly similar thereto including without limitation the trademarks and/or trade names MY SKINNY, SKINNY, SKINNY RICE, MY SKINNY RICE, SKINNY PETS, MY SKINNY PETS, SKINNY PET TREATS, and MY SKINNY PET TREATS - in connection with the sale, offering for sale, distribution, marketing, display, promotion and/or advertisement of foods intended for consumption by humans and/or pets. (Plaintiff's and Counterdefendants' Motion to Implement on-the- Record Settlement with Consent Judgment/Injunction, dated August 19, 2013 (Docket Item 20), Ex. 1 at 4-5). Defendants object to the inclusion of the mark SKINNY in the decretal portion of the consent injunction. Specifically, defendants note that they never agreed on the record to an injunction prohibiting them from using the mark SKINNY, and that defendants agreed not to infringe the marks at issue in this litigation -- SKINNY PETS and MY SKINNY PETS, as well as the SKINNY RICE and MY SKINNY RICE marks. Nothing more.... If Time Square is genuine about its interpretation of the terms of the injunction (despite the contrary record) then the parties did not have a meeting of the minds. (Declaration of Marc A. Lebowitz, Esq., dated September 13, 2013 (Docket Item 23) ("Lebowitz Decl.") 16, 17-18). 7

8 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 8 of 13 III. Analysis The parties' dispute presents two issues for resolution: (1) was there a meeting of the minds on the existence of a settlement, and, if so (2) is the mark SKINNY with respect to food for humans or pets within the terms of the injunction to which the defendants agreed. For the reasons set forth below, I respectfully submit that the answer to both questions is yes. With respect to the first question, any unspoken intentions or subjective limitations that the parties' or their attorneys may have harbored at the time they agreed to settle their disputes are immaterial to the existence of a binding settlement agreement. As explained more than 100 years ago by the Honorable Learned Hand, the existence of a contract is determined by what a party says and does and not subjective beliefs, intentions or assumptions: A contract has, strictly seeking, nothing to do with the personal, or individual, intent of the parties. A contract is an obligation attached by the mere force of law to certain acts of the parties, usually words, which ordinarily accompany and represent a known intent. If, however, it were proved by twenty bishops that either party, when he used the words, intended something else than the usual meaning which the law imposes upon them, he would still be held, unless there were some mutual mistake, or something else of the sort. 8

9 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 9 of 13 Hotchkiss v. Nat'l City Bank, 200 F. 287, 293 (S.D.N.Y. 1911) (L. Hand, D.J.), aff'd, 201 F. 664 (2d Cir. 1912), aff'd, 231 U.S. 50 (1913); accord Ricketts v. Pa. R.R. Co., 153 F.2d 747, (2d Cir. 1946) (Frank, Cir. J., concurring op.); Chesapeake Energy Corp. v. Bank of N.Y. Mellon Trust Co., N.A., 13 Civ (PAE), 2013 WL at *19 (S.D.N.Y. May 8, 2013) (Engelmayer, D.J.); Sea Shipping Inc. v. Half Moon Shipping, LLC, 848 F. Supp. 2d 448, 457 (S.D.N.Y. 2012) (Engelmayer, D.J.); Hanson v. McCaw Cellular Commc'ns, Inc., 881 F. Supp. 911, (S.D.N.Y. 1995) (Kaplan, D.J.); John's Insulation, Inc. v. Siska Constr. Co., 671 F. Supp. 289, 293 (S.D.N.Y. 1987) (Conner, D.J.). The principle is, literally, hornbook law, Joseph M. Perillo, Calamari & Perillo on Contracts 2.2 (6th ed. 2009), and applies equally to issues concerning the formation and interpretation of a contract. Glencore Ltd. v. Degussa Engineered Carbons L.P., 848 F. Supp. 2d 410, 424 (S.D.N.Y. 2012) (Engelmayer, D.J.); Walsh v. Md. Bank, N.A., 91 Civ (CSH), 1994 WL at *2 (S.D.N.Y. Apr. 14, 1994) (Haight, D.J.); Brown Bros. Elec. Contractors, Inc. v. Beam Constr. Corp., 41 N.Y.2d 397, 399, 361 N.E.2d 999, 1001, 393 N.Y.S.2d 350, 351 (1977) ("[T]he existence of a binding contract is not dependent on the subjective intent" of the parties.). 9

10 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 10 of 13 As evidenced by the colloquy quoted above, defendants unequivocally agreed to the entry of an injunction prohibiting them from "using the disputed marks and anything confusingly similar" (Tr. at 3 (emphasis added)). At no time during the colloquy did defendants express an intent to reserve their putative right to use SKINNY as a trademark for food products for human or animal consumption. Thus, there is a binding settlement and the only remaining issue is whether the mark SKINNY is confusingly similar to the marks MY SKINNY, MY SKINNY RICE, MY SKINNY PETS or MY SKINNY PET TREATS for food products for human or animal consumption. There can be little question that SKINNY is confusingly similar to the marks MY SKINNY, MY SKINNY RICE, MY SKINNY PETS or MY SKINNY PET TREATS when used for food products for human or animal consumption. The presence or absence of the single, one syllable word "my" is insufficient to distinguish SKINNY from plaintiff's marks when used in connection with similar goods. See Coca Cola Co. v. Purdy, 382 F.3d 774, 784 (8th Cir. 2004) (finding confusing similarity where "[m]any of [defendant's] domain names differ from plaintiffs' marks only by the addition of generic terms like 'my,' 'says,' or 'drink' or by the addition of a top level domain suffix"); E. Daltroff & Cie v. Vivaudou, Inc., 53 F.2d 536, 537 (Cust. & Pat. App. 1931) (CHEZ LUI confus- 10

11 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 11 of 13 ingly similar to CHEZ MOI when used in connection with similar products); New Metro. Fiction v. Dell Pub. Co., 19 F.2d 718, 718 (D.C. Cir. 1927) (magazine title MODERN MARRIAGE confusingly similar to magazine titles MARRIAGE and MARRIAGE STORIES); Webadviso v. Trump, 927 F. Supp. 2d 32, (E.D.N.Y. 2013) (domain names trumpbeijing, trumpindia, trumpmumbai and trumpabudhabi confusingly similar to Donald Trump's TRUMP and related marks); CJ Prods. LLC v. Snuggly Plushez LLC, 809 F. Supp. 2d 127, (E.D.N.Y. 2011) (owner of mark MY PILLOW PETS entitled to preliminary injunction against defendant's use of Google AdWord "pillow pets"). 1 1 In their opposition to plaintiff/counterclaim defendants' motion, defendants suggest that SKINNY cannot be used as a trademark for food products (Lebowitz Decl. 13). Whether this argument is correct is immaterial. Nothing said during the colloquy on June 7, 2013 even suggested that defendants' consent to the injunction was conditioned on the validity of SKINNY as a trademark. Defendants' also suggest that plaintiff/counterclaim defendants' motion is a veiled attempt to secure an agreement not to compete (Lebowitz Decl. 16). This argument is specious. The consent judgment and injunction proposed by movants does not limit the nature or location of any commercial venture the defendants may wish to undertake. It merely limits the marks defendants can use in connection with any such venture. 11

12 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 12 of 13 IV. Conclusion Accordingly, for all the foregoing reasons, I respectfully recommend that plaintiff/counterclaim defendants' motion be granted, that the conditional order of dismissal entered in this matter on July 18, 2013 be vacated and that the consent judgment and injunction in the form proposed by plaintiff/counterclaim defendants be entered. V. OBJECTIONS Pursuant to 28 U.S.C. 636(b)(1)(c) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from receipt of this Report to file written objections. See also Fed.R.Civ.P. 6(a). Such objections (and responses thereto) shall be filed with the Clerk of the Court, with courtesy copies delivered to the Chambers of the Honorable Paul A. Engelmayer, United States District Judge, 40 Foley Square, Room 2201, New York, New York and to the Chambers of the undersigned, 500 Pearl Street, Room 750, New York, New York Any requests for an extension of time for filing objections must be directed to Judge Engelmayer. FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. Thomas v. Arn, 12

13 Case 1:12-cv PAE-HBP Document 25 Filed 01/14/14 Page 13 of U.S. 140, 155 (1985); United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v. Canadair Ltd., 838 F.2d 55, (2d Cir. 1988); McCarthy v. Manson, 714 F.2d 234, (2d Cir. 1983). Dated: New York, New York January 14, 2014 Respectfully submitted, United States Magistrate Judge Copies transmitted to: Dennis Grossman, Esq. 14 Bond Street (#600) Great Neck, New York Marc A. Lebowitz, Esq. Lebowitz Law Offices LLC 35th Floor 777 Third Avenue New York, New York