Second Circuit Filings Regarding Dismissal of Claims in Christian Louboutin SA v. Yves Saint Laurent, Inc.

Harley I.
Lewin
Partner
T.212.609.6818
F.212602.0122
hlewin@mccarter.com
McCarter &English, LLP
245 Park Avenue
27th Floor
New York, NY 10167-0001
1. 212.609.6800
F.212.609.6921
www.mccarteLcom
BOSTON
HARTFORD
NEW YORK
NEWARK
PHILADELPHIA
STAMFORD
WILMINGTON
McCARTER
&ENGLISH
ATIORNEYS AT LAW
November 16, 2012
USDC SDNY
BY HAND
11::\1'
Honorable Victor Marrero
ELECTRO!\'IC.\LLY FILED
United States District Judge
DOC#
Daniel Patrick Moynihan
United States Courthouse
. ;DATE
500 Pearl Street
-.' -.
New York, NY 10007-1312
Re: Christian Louboutin S.A., et al. v. Yves Saint Laurent America, Inc., et al.
No. 11 Civ. 02381 (VM)
Dear Judge Marrero:
We write only to comment on the representation made to you by Mr. Hamid, counsel
to YSL, that somehow there was a prior agreement between counsel and that the
current dispute occurs because of the conduct of Louboutin and its counsel.
Ordinarily we would have contacted you immediately on receipt of Mr. Hamid's
letter. However, Mr. Bromberg, who attended your telephone conference, was in
court in Los Angeles attending a Markman hearing and I was thus not able to
discuss the representations made by Mr. Hamid with Mr. Bromberg until late Pacific
Coast Time, which was far too late East Coast Time to get you our comments.
We strenuously reject YSL's counsel's repeated contention that there has been any
agreement in this matter. (See Letter of Jyotin Hamid to Honorable Victor Marrero
dated November 15, 2012) We did agree to paragraphs 2 and 3 of YSL's proposed
stipulation regarding dismissal of YSL's counterclaims, but never reached
agreement on the language to be used to address Louboutin's claims. In the
telephone discussion with Your Honor, we agreed to consider language suggested
by the Court and a proposed draft to be made by YSL counsel. We have not
reached agreement on such language for the reasons set forth in our previous
letters to the Court and that delivered to your Honor late yesterday.
As your Honor recognizes, the Second Circuit did not "dismiss" Louboutin's claims,
much less dismiss them "with prejudice." What the Second Circuit did do is uphold
this Court's finding that the Red Sole Mark of Louboutin had established strong
secondary meaning and then declare on that basis that the Red Sole Mark is a
valid, enforceable trademark, as modified by the Second Circuit to exclude the YSL
monochrome shoe. That is not a dismissal of rights but instead a ringing
endorsement of valid, enforceable trademark rights.
ME114418167v.1
Case 1:11-cv-02381-VM Document 77 Filed 11/28/12 Page 1 of 2
Hon. Victor Marrero
November 16, 2012
Page 2
We reiterate our insistence that YSL counsel refrain from representing to this Court
that we have ever reached final agreement and the false refrain that we are
somehow reneging on a prior agreement. Counsel for YSL has no right to represent
that there is an agreement with us until they have a signed stipulation, signed by us
on behalf of Louboutin. We will not be badgered into surrendering any rights of our
client.
Ordinarily, it is not our practice to engage in this kind of discourse in letters to the
Court or otherwise however the content of Mr. Hamid's letter demanded that we
advise the Court of our position regarding the aforesaid representations. We
respectfully request that this Court disregard entirely any representation made by
counsel to YSL and adopt the proposed Stipulation and Order we offered yesterday.
As noted above, the Second Circuit decision stands as a strong holding of validity
and enforceability of the Red Sole Mark, as modified. YSL is not entitled to a
"dismissal" "with prejudicfjof the holding of the Second Circuit that would dilute or
negate its value.' !
Re.s. ... t, ... d.' .1('\-/
':j .. / .e
':t!,cr/ '/
Ha /
cc: . yotin Hamid, Esq. (bye-mail)
David H. Bernstein, Esq. (bye-mail)
ME1 14418167v.1
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
Christian Louboutin S.A., Christian Louboutin,
L.L.C. and Christian Louboutin,
Plaintiffs/Counterclaim-Defendants,
vs.
Yves Saint Laurent America, Inc., Yves Saint
Laurent America Holding, Inc. and
Yves Saint Laurent S.A.S., et al.,
Defendants/Counterclaim-Plaintiffs.
:
:
:
:
:
:
:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
Civil Action Number 11-cv-2381 (VM)
ECF Case
MEMORANDUM OF LAW OF DEFENDANTS/COUNTERCLAIM-PLAINTIFFS
IN SUPPORT OF MOTION TO DISMISS THEIR COUNTERCLAIMS VOLUNTARILY
DEBEVOISE & PLIMPTON LLP
David H. Bernstein (dhbernstein@debevoise.com)
Jyotin Hamid (jhamid@debevoise.com)
Rayna S. Feldman (rsfeldman@debevoise.com)
919 Third Avenue
New York, New York 10022
Telephone 212-909-6696
Dated: New York, New York Counsel to Defendants and Counterclaim Plaintiffs
October 16, 2012 Yves Saint Laurent America, Inc.,
Yves Saint Laurent America Holding, Inc.,
and Yves Saint Laurent S.A.S.
Yves Saint Laurent America, Inc., Yves Saint Laurent America Holding, Inc. and Yves
Saint Laurent S.A.S. (collectively, YSL) respectfully submit this memorandum of law in
support of their motion to dismiss voluntarily their counterclaims against Christian Louboutin
S.A., Christian Louboutin L.L.C. and Christian Louboutin (collectively, Louboutin).
PRELIMINARY STATEMENT
In its September 5, 2012 ruling in this case, the U.S. Court of Appeals for the Second
Circuit directed that final judgment be entered in YSLs favor on all of Louboutins federal
trademark claims. The Court of Appeals ruled conclusively that the YSL monochromatic shoes
that Louboutin challenged in this lawsuit do not infringe any trademark rights of Louboutin.
As a result, the only issues remaining to be litigated in this case are YSLs counterclaims
against Louboutin. In light of YSLs conclusive victory in defeating Louboutins claims, and for
the reasons detailed herein, YSL believes it appropriate to dismiss its counterclaims voluntarily,
thus resolving what remains of this litigation and allowing the parties to close the book on this
litigation and refocus their attention on their respective fashion creations.
Counterclaims Seeking Cancellation. Four of YSLs counterclaims seek cancellation of
Louboutins U.S. Trademark Registration on various bases. This Court had subject matter
jurisdiction over those counterclaims only because Louboutin had asserted claims for trademark
infringement against YSL. With Louboutins claims now removed as a result of the Second
Circuit ruling, this Court no longer has subject matter jurisdiction with respect to YSLs
counterclaims seeking cancellation. Under controlling law in this Circuit, district courts lack
subject matter jurisdiction to adjudicate a claim for cancellation of a federal trademark
registration if no other basis for federal jurisdiction is present; instead, such claims must be
brought before the Trademark Trials & Appeals Board (the T.T.A.B.) of the United States
2
Patent & Trademark Office. Accordingly, the counterclaims seeking cancellation should be
dismissed without prejudice.
Counterclaims for Tortious Interference and Unfair Competition. YSLs fifth and
sixth counterclaims, for tortious interference and unfair competition, are based on Louboutins
efforts in early 2011 to pressure certain retailers to return to YSL the red monochromatic shoes
challenged in this case. Although YSL maintains its view that such actions were wrongful, YSL
was able to mitigate some of its damages by re-selling the returned inventory at YSL boutiques
or through e-commerce. In light of that, and given its desire to refocus its energies on its
business and creative designs, YSL has decided that these claims are no longer worth pursuing.
Accordingly, YSL voluntarily dismisses those counterclaims with prejudice.
PROCEDURAL HISTORY
Louboutin filed its Complaint and moved for a preliminary injunction on April 7, 2011,
challenging four models of red monochromatic shoes sold by YSL, and asserting federal
trademark claims and related state law claims. YSL filed an Answer and Counterclaims on May
20, 2011, and an Amended Answer and Counterclaims on June 27, 2011. YSL asserted six
counterclaims: four seeking cancellation of Louboutins federal Trademark Registration on
various grounds, and the two for tortious interference and unfair competition, respectively, based
on Louboutins efforts in early 2011 to pressure certain retailers to return to YSL the red
monochromatic shoes challenged in this case.
On July 22, 2011, this Court held a hearing on Louboutins motion for a preliminary
injunction. Preceding the hearing was a period for expedited discovery and full briefing, but
both the discovery and the briefing were limited to issues raised by Louboutins motion; they did
not include any discovery or briefing on YSLs counterclaims. To date, no discovery of any kind
has been taken or exchanged on the counterclaims.
3
On August 10, 2011, this Court issued its opinion denying Louboutins motion for a
preliminary injunction. Louboutin took an interlocutory appeal. Subsequently, in response to
Louboutins request, this Court stayed further action on the litigation.
On September 5, 2012, the Second Circuit ruled on Louboutins appeal. The Second
Circuit affirmed the district courts denial of Louboutins request for an injunction. The Second
Circuit further held that the YSL monochromatic red shoes at issue in this lawsuit do not violate
any rights of Louboutin. The Second Circuit thus directed that final judgment be entered in
YSLs favor on all of Louboutins federal trademark claims, and remanded this case for further
proceedings related to YSLs counterclaims.
ARGUMENT
I. Applicable Standards.
Rule 41(a)(2) of the Federal Rules of Civil Procedure permits a District Court to dismiss
an action at a plaintiffs request, with or without prejudice. The rule applies equally to the
dismissal of a defendants counterclaims where, as here, the plaintiff has served an answer to
those counterclaims. See Fed. R. Civ. P. 41(c).
A request for the voluntary dismissal of an action without prejudice should be granted
absent prejudice to the other party. Catanzano v. Wing, 277 F.3d 99, 109 (2d Cir. 2001);
Wakefield v. N. Telecom, Inc., 769 F.2d 109, 114 (2d Cir. 1985). Such a dismissal is proper in
cases where (i) the counterclaim-plaintiff did not delay in bringing the motion; (ii) there is no
evidence that the action was brought to harass; (iii) the action progressed very little and no
discovery has been taken; (iv) no expenses would be duplicated if the counterclaim-defendant
were forced to relitigate the counterclaims in another suit; and (v) the counterclaim-plaintiff has
a resasonable explanation for dismissing the action. See, e.g., In re Solv-Ex Corp. Sec. Litig.,
2003 U.S. App. LEXIS 7409, *4-5 (2d Cir. 2003) (applying factors set forth in Zagano v.
4
Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990)); AET Rail Group, LLC v. Siemens Transp. Sys.,
Inc., No. 08-CV-6442, 2009 WL 5216960, at *2-3 (W.D.N.Y. Dec. 30, 2009) (applying Zagano
factors to motion seeking dismissal of counterclaims without prejudice).
II. The Counterclaims Seeking Cancellation Should Be Dismissed Without Prejudice.
Dismissal of YSLs counterclaims seeking cancellation of Louboutins federal
Trademark Registration is required because this Court no longer has subject matter jurisdiction
over YSLs counterclaims for cancellation. Under controlling law, a federal district court lacks
subject matter jurisdiction to adjudicate a claim for cancellation of a federal trademark
registration if no other basis for federal jurisdiction is present. See Nike, Inc. v. Already, LLC,
663 F.3d 89, 94, 98-99 (2d Cir. 2011), cert. granted, --- S. Ct. ---, 2012 WL 425184 (2012) (once
plaintiffs claims for trademark infringement were conclusively terminated, dismissal of
defendants counterclaim for cancellation was appropriate because court lacked subject matter
jurisdiction over counterclaims for cancellation). Although Louboutins claims against YSL
previously provided a basis for subject matter jurisdiction in the district court, that basis is no
longer present now that the Second Circuit has directed that final judgment be entered in YSLs
favor on all of Louboutins federal trademark claims.
Applying the Zagano factors, the dismissal of YSLs counterclaims seeking cancellation
should be without prejudice:
YSL has a reasonable explanation for seeking dismissal: The Second Circuits
ruling has removed the basis for the Courts subject matter jurisdiction over
YSLs counterclaims.
YSL has brought this motion very promptly: YSL has filed this motion within
three weeks of the Second Circuit issuing its mandate (on September 27).
There is no evidence that YSL asserted its counterclaims for cancellation of
Louboutins Trademark Registration in bad faith or to harass Louboutin. To the
contrary, YSL believed and this Court and the Second Circuit both agreed that
Louboutins Trademark Registration was not valid as previously registered.
5
This action has not reached an advanced stage of proceedings, and no discovery
has taken place with respect to any of YSLs counterclaims.
Because no discovery has taken place on these counterclaims, Louboutin would
not have to duplicate expenses if it were forced to relitigate YSLs claims for
cancellation in the future or in another forum (such as the T.T.A.B.).
Furthermore, the law is clear in this Circuit that the mere prospect of a second
lawsuit is not a sufficent reason to deny a partys request for voluntary dismissal
without prejudice. Lopes v. First Unum Ins. Co., No. 09CV02642
(RRM)(SMG), 2012 WL 3887517, at * 1 (E.D.N.Y. Sept. 7, 2012) (citing Cone v.
West Virigina Pulp & Paper Co., 330 U.S. 212, 217 (1947)); see also Charles A.
Wright & Arthur R. Miller, 9 Federal Practice and Procedure 2364, at 474-76
(3d ed. 2008)).
Accordingly, YSL respectfully submits that its counterclaims seeking cancellation of
Louboutins Trademark Registration should be dismissed without prejudice.
III. The Counterclaims For Tortious Interference and Unfair Competition Should Be
Dismissed With Prejudice.
YSLs counterclaims for tortious interference and unfair competition were brought as a
result of Louboutins efforts in early 2011 to pressure certain retailers to return to YSL the red
monochromatic shoes challenged in this case. Although YSL maintains its position that such
conduct was improper, YSL was able to mitigate some of its damages by re-selling the returned
inventory to its customers through YSL boutiques and through e-commerce. Now that the
Second Circuit has definitively rejected Louboutins claims against YSL, YSL prefers to refocus
its energies on its business and creative designs, and has determined that these claims are no
longer worth pursuing. As such, YSL is willing to dismiss these counterclaims with prejudice.
Because Louboutin can have no conceivable objection to the dismissal of these claims
with prejudice, YSL respectfully requests that the Court dismiss its counterclaims for tortious
interference and unfair competition with prejudice.
6
CONCLUSION
For the foregoing reasons, YSL respectfully requests that the Court grant YSLs motion
to dismiss voluntarily its first four counterclaims without prejudice and its fifth and sixth
counterclaims with prejudice.
Dated: New York, New York
October 16, 2012
Respectfully submitted,
/s/ David H. Bernstein_________________
919 Third Avenue
Telephone 212-909-6696
Counsel to Yves Saint Laurent America, Inc.,
919 Third Avenue
(212) 909-6000
Attorneys for Yves Saint Laurent America, Inc.,
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
Christian Louboutin S.A., Christian Louboutin,
L.L.C. and Christian Louboutin,
Plaintiffs/Counterclaim-Defendants,
vs.
Yves Saint Laurent America, Inc., Yves Saint
Laurent America Holding, Inc. and Yves Saint
Laurent S.A.S., et al.,
Defendants/Counterclaim-Plaintiffs.
:
:
:
:
:
:
:
:
:
:
:
:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
Civil Action Number 11-cv-2381 (VM)
ECF Case
NOTICE OF MOTION TO DISMISS DEFENDANTS/COUNTERCLAIM-
PLAINTIFFS COUNTERCLAIMS VOLUNTARILY
PLEASE TAKE NOTICE THAT, upon the accompanying memorandum of law,
dated the 16th day of October, 2012, and upon all prior pleadings and proceedings herein,
Defendants/Counterclaim-Plaintiffs Yves Saint Laurent America, Inc., Yves Saint Laurent
America Holding, Inc. and Yves Saint Laurent S.A.S. (collectively, YSL), by and through
their attorneys, Debevoise & Plimpton LLP, will move this Court on a date and time to be set
by the Court, before the Honorable Victor Marrero, United States District Judge, at the
2
United States Courthouse, United States District Court Southern District of New York, 500
Pearl Street, New York, New York, for an order pursuant to Fed. R. Civ. P. 41(a)(2) and (c):
(1) dismissing YSLs counterclaims for cancellation without prejudice; and (2) dismissing
YSLs counterclaims for tortious interference and unfair competition with prejudice, and for
such other and further relief as the Court may deem just and proper.
Dated: New York, New York
October 16, 2012
/s/ David H. Bernstein____________
919 Third Avenue
(212) 909-6696
Attorneys for Yves Saint Laurent America, Inc.,
To: Harley I. Lewin, Esq.
McCarter & English, LLP
245 Park Avenue, 27
th
Floor
Lee Carl Bromberg, Esq.
McCarter & English, LLP
265 Franklin Street
Boston, MA 02110

Second Circuit Filings Regarding Dismissal of Claims in Christian Louboutin SA v. Yves Saint Laurent, Inc.

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Second Circuit Filings Regarding Dismissal of Claims in Christian Louboutin SA v. Yves Saint Laurent, Inc.

Uploaded by

Copyright:

Available Formats

Harley I.

You might also like