Camelot SI, LLC v. ThreeSixty Brands Group, LLC

CourtDistrict Court, S.D. New York
DecidedSeptember 30, 2022
Docket1:21-cv-08232
StatusUnknown

This text of Camelot SI, LLC v. ThreeSixty Brands Group, LLC (Camelot SI, LLC v. ThreeSixty Brands Group, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Camelot SI, LLC v. ThreeSixty Brands Group, LLC, (S.D.N.Y. 2022).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK CAMELOT SI, LLC, Plaintiff, - against - OPINION & ORDER 21 Civ. 8232 (ER) THREESIXTY BRANDS GROUP LLC f/k/a 360 HOLDINGS II-A LLC and MERCHSOURCE, LLC, Defendants.

RAMOS, D.J.: Camelot SI, LLC brings this action against ThreeSixty Brands Group LLC and MerchSource LLC, alleging that defendants infringed upon Camelot’s exclusive e-commerce rights to the SHARPER IMAGE brand. Doc. 1. Pending before the Court is ThreeSixty’s partial motion to dismiss for failure to state a claim. Doc. 19. For the reasons set forth below, the motion is GRANTED. I. BACKGROUND1 a. The Manufacturing License Agreement Since 2009, Camelot, a limited liability company based in Michigan, has been operating as licensee of THE SHARPER IMAGE and SHARPER IMAGE trademarks and logos (the “Trademarks”). ¶¶ 1, 7. On August 14, 2013, Camelot and then-licensor, Icon NY Holdings, LLC (“Icon”), entered into a manufacturing agreement (the “Manufacturing License Agreement”), whereby

1 The following facts are based on the allegations in the first amended complaint (“FAC”), which the Court accepts as true for the purposes of the instant motion. Unless otherwise noted, citations to “¶ __” refer to the FAC, Doc. 40. Icon granted Camelot a non-exclusive license to manufacture and source-manufacture SHARPER IMAGE branded products. ¶ 9; see Doc. 41. In pertinent part, the Manufacturing License Agreement provides: Subject to the terms and conditions of this Agreement, [Icon] hereby grants to [Camelot] a non-exclusive license solely throughout the Territory to use the Licensed Mark in connection with the manufacture, advertising, promotion, marketing, distribution and sale solely of (i) Products approved by [Icon] for use by [Camelot] at retail (the “Retail Products”) solely via the website “sharperimage.com”, the Sharper Image catalogue and [Camelot]-owned retail outlets (collectively, the “Approved Retail Channels”) and (ii) with [Icon]’s express written consent on a case-by-case basis, Products approved by [Icon] for use by [Camelot] at wholesale (the “Wholesale Products”) solely to such accounts as [Icon] approves in writing (the “Approved Wholesale Channels” and, together with the Approved Retails Channels, the “Approved Accounts”) pursuant to this Agreement; provided, however, that [Camelot] may only manufacture, advertise, promote, market, distribute and sell any given Product if [Icon] determines, in its sole discretion, that the quality of such Product is at least equivalent to the quality of the same or similar Product as it is being produced by [Icon]’s other licensee(s) for such Product.

¶ 10. Additionally, the Manufacturing License Agreement provides that: If [Camelot] otherwise fails to perform any of the terms, conditions, agreements or covenants in this Agreement on its part to be performed or takes any action, or fails to take any action, which action or omission is materially harmful to [Icon], and if (i) such default or harm is not curable, or (ii) such default or harm is curable but continues uncured for a period of twenty (20) days after notice thereof has been given to [Camelot] by [Icon], then [Icon], at its sole election, may terminate this Agreement forthwith by notice to Licensee.

¶ 66.

b. The Purchase Agreement The following year, on June 30, 2014, Camelot and Icon entered into a Website and Catalog Rights Purchase Agreement (the “Purchase Agreement”). ¶ 11; see Doc. 42. At that time, the Sharper Image brand was bankrupt, and “[m]any . . . customers were angry [as t]hey had invalid gift cards or products that could not be exchanged or returned.” ¶ 25. The Purchase Agreement replaced an earlier 2009 license and distribution agreement between the parties and rendered the Manufacturing License Agreement “a separate, stand-alone agreement[.]” ¶¶ 11–12. Pursuant to the Purchase Agreement, the Manufacturing License Agreement would “solely” govern “the manufacture and sale of goods and products branded with the Trademarks,” while the Purchase Agreement would separately govern “the branding of

E-Commerce Services and Catalog Services.” ¶ 12. The Purchase Agreement defines “E-Commerce Services” as “[r]etail services in the form of online retail services offered via the [w]ebsite [SharperImage.com], Social Media, other digital retail sales platforms similar to the [w]ebsite and derivations therefore that are later developed for the purposes of offering retail sales direct to consumers, in each of the foregoing cases, branded under the SHARPER IMAGE brand and the Trademarks[.]” ¶ 15. The Purchase Agreement granted Camelot a license to use the Trademarks in e-commerce; it provides in pertinent part: Subject to the terms and conditions set forth herein, [Icon] hereby grants to [Camelot] . . . the exclusive, personal non-transferable, non-assignable (except in accordance with [§] 14(b)(vi)), non-sublicensable right and license to use the Trademarks during the [specified term], solely in connection with the E- Commerce Services only in the [specified e-commerce territory . . .], and for no other products or services. The foregoing license shall allow [Camelot] to reformat the [w]ebsite as an online “app” and to use [s]ocial [m]edia . . ., subject however, to any existing [c]ontract involving the SHARPER IMAGE brand, the rights of licensees in the [e]xcluded [j]urisdictions, the rights of [Icon’]s other licensees (both current and future) offering SHARPER IMAGE branded products through non-SHARPER IMAGE branded online retail sales or marketing platforms similar to the E-Commerce Services and the other terms set forth herein. In this regard, the license granted by [§] 3(a)(i) is nonexclusive for “apps” and [s]ocial [m]edia to the extent indicated in the previous sentence. Additionally, on a non-exclusive basis, and in accordance with the Manufacturing Addendum, [Camelot] may continue to offer SHARPER IMAGE branded products in the E-Commerce Territory at retail directly to consumers through third party online retail sales platforms (e.g., Amazon and e-Bay); provided that it is acknowledged and agreed by [Camelot] that [Icon]’s other licensees (both current and future) offering SHARPER IMAGE branded products through non- SHARPER IMAGE branded online retail sales or marketing platforms may continue to do so notwithstanding the rights granted herein to [Camelot].

¶ 14. The Purchase Agreement also stipulates that the contracting parties must use “commercially reasonable efforts to protect the good name and goodwill associated with the Trademarks and the SHARPER IMAGE brand.” ¶ 16. This provision further stipulates that the parties must “support the SHARPER IMAGE brand by refraining from, and using commercially reasonable efforts to cause their [a]ffiliates or licensees to refrain from, conduct that is illegal, offensive or would tend to subject the other Party . . . to ridicule, contempt, controversy, embarrassment, or scandal.” Id. Specifically, [n]either Party may use, nor shall it permit its [a]ffiliates or licensees to use, the Trademarks in any way that could (i) negatively reflect upon, dilute or otherwise tarnish the SHARPER IMAGE brand or the Trademarks, or (ii) compromise or reflect unfavorably upon the good name, goodwill, reputation or image of the other Party. For the avoidance of doubt, these obligations specifically include any content or messaging distributed through Social Media.

Id. Lastly, the Purchase Agreement provides: At any time and from time to time after the [effective date of this agreement, Icon] shall, for no further consideration and at [Camelot]’s sole cost and expense, execute and deliver all such other further documents and perform all further acts that may be reasonably requested by [Camelot] to effectuate the terms and provisions of this Agreement.

Id.

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Bluebook (online)
Camelot SI, LLC v. ThreeSixty Brands Group, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/camelot-si-llc-v-threesixty-brands-group-llc-nysd-2022.