E. Gluck Corp. v. Rothenhaus

252 F.R.D. 175, 71 Fed. R. Serv. 3d 346, 2008 U.S. Dist. LEXIS 58103, 2008 WL 2944624
CourtDistrict Court, S.D. New York
DecidedJuly 31, 2008
DocketNo. 08 Civ. 3466(VM)
StatusPublished
Cited by39 cases

This text of 252 F.R.D. 175 (E. Gluck Corp. v. Rothenhaus) 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
E. Gluck Corp. v. Rothenhaus, 252 F.R.D. 175, 71 Fed. R. Serv. 3d 346, 2008 U.S. Dist. LEXIS 58103, 2008 WL 2944624 (S.D.N.Y. 2008).

Opinion

DECISION AND ORDER

VICTOR MARRERO, District Judge.

Plaintiff E. Gluck Corporation (“Gluck”) filed a Complaint (the “Complaint”), alleging that defendant Adam Rothenhaus (“Rothenhaus”): (1) infringed its NOW trademark (“NOW”) in violation of Section 32 of the Lanham Act (the “Lanham Act”), 15 U.S.C. § 1114(1); (2) engaged in cyberpiracy by maintaining the domain name www. thenowwatch.com (the “Domain Name”) in violation of Section 43(d) of the Lanham Act, 15 U.S.C. § 1125(d) (“ § 1125”); and (3) engaged in unfair competition in violation of Section 43 of the Lanham Act, § 1125(a). Among other relief, Gluck seeks: to restrain Rothenhaus from infringing Gluck’s NOW trademark, including use or display of The Now Watch (“The Now Watch”) name or mark; to have Rothenhaus abandon his trademark application (the “Initial Application”) with the United States Patent and Trademark Office (the “PTO”); and to permanently prohibit Rothenhaus from seeking registration of any mark incorporating the term “NOW” for watches or watch related products. Rothenhaus now moves for sanctions (the “Rule 11 Motion”) to be imposed against Gluck and its counsel, Gottlieb Rack-man & Reisman, P.C. (“GRR”), pursuant to Federal Rule of Civil Procedure 11 (“Rule 11”). Specifically, Rothenhaus seeks: (1) dismissal of the Complaint; (2) attorney’s fees and costs in connection with the instant motion; and (3) any such other measures as this Court deems appropriate. Gluck contends that the Rule 11 Motion is itself without merit and seeks reimbursement of costs in opposing this motion pursuant to Rule 11(c)(2). For the reasons stated below, Rothenhaus’s Rule 11 Motion is denied, and Gluck’s request for attorney’s fees is denied.

I. BACKGROUND1

Gluck creates, designs, and manufactures watches sold under various trademarks. [178]*178These watches are sold nationwide through thousands of retailers. At issue in the underlying case is Gluck’s NOW trademark, which has been registered with the PTO since 1986,2 and is featured on the face of a line of women’s watches. Rothenhaus also produces and manufactures an allegedly similar product, The Now Watch, which contains the term “Now” on the face of the watch, and the term “The Now Watch” on the box. Additionally, Rothenhaus has registered his Domain Name, where he advertises and sells The Now Watch.

Rothenhaus filed the Initial Application with the PTO to register The Now Watch on an intent-to-use basis (indicating the mark was not in use) on February 7, 2006. The PTO rejected the Initial Application on August 1, 2006 (the “August Rejection”), finding a “likelihood of confusion” with Gluck’s NOW trademark, and that “the goods are highly related: watches and watch faces.” (PTO Office Action, dated Aug. 1, 2006, attached as Ex. D to Am. Compl., at 2.) After receiving the August Rejection, Rothenhaus issued a Response to Office Action (the “Response”) on October 12, 2006 (the “October Response”). The PTO rejected the October Response on December 1, 2006 based upon the “similarity of goods” and “similarity of the marks.” (PTO Office Action, dated Dec. 1, 2006, attached as Ex. F to Am. Compl., at 2. ) Rothenhaus filed a second Response on December 24, 2007 that was again rejected on January 25, 2008. (See PTO Office Action, dated Jan. 25, 2008, attached as Ex. H to Am. Compl.)

On March 25, 2008, Gluck sent Rothenhaus a cease and desist letter (the “Cease and Desist Letter”) demanding that Rothenhaus:

(1) immediately cease use of the phrase “the Now Watch,” the NOW mark (or any other names similar thereto); (2) immediately transfer the domain name cthenowwatch.eom> to [Gluck]; (3) forward to [Gluck] documentation reflecting the manufacture, importation and sales of the infringing items to date; (4) indicate to [Gluck] the remaining quantity of infringing products currently in inventory under [Rothenhaus’s] company’s control; and (5) provide an accounting to [Gluck] for all sales of these products made to date, and agree to compensate [Gluck] accordingly.

(Letter to Rothenhaus from GRR, dated March 25, 2008, attached as Ex. A to Schurin Aff., at 2-3.) After Rothenhaus failed to comply with these demands, Gluck filed the Complaint in this Court against Gluck. Rothenhaus asserts that the Complaint is frivolous, and filed the Rule 11 Motion on May 13, 2008. Subsequently, Gluck filed the Amended Complaint, and, on June 6, 2008, Gluck filed a motion for a preliminary injunction (the “Preliminary Injunction Motion”).

II. LEGAL STANDARD

Rule 11(b) provides that:

By presenting to the court a pleading, written motion, or other paper — whether by signing, filing, submitting, or later advocating it — an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery.

Fed. R Civ. P. 11(b). Courts may issue Rule 11 Sanctions only in extraordinary circumstances. See Park v. Seoul Broad. Sys. Co., No. 05 Civ. 8956, 2008 WL 619034, at *1 (S.D.N.Y. Mar.6, 2008) (citation omitted); see also Louis Vuitton Malletier v. Dooney & Bourke, Inc., No. 04 Civ. 5316, 2006 WL 2807213, at *6 (S.D.N.Y. Sept. 28, 2006) (“Sanctions should always be a (very) last resort.”) (citation omitted). “ ‘[T]he standard for triggering the award of fees under Rule 11 is objective unreasonableness’ and is not [179]*179based on the subjective beliefs of the person making the statement.” Storey v. Cello Holdings, L.L.C., 347 F.3d 370, 387 (2d Cir.2003) (quoting Margo v. Weiss, 213 F.3d 55, 65 (2d Cir.2000)).

The appropriateness of sanctions is distinct from the underlying merits of a claim. See Abdelhamid v. Altria Group, Inc., 515 F.Supp.2d 384, 392 (S.D.N.Y.2007) (“ When divining the point at which an argument turns from merely losing to losing and sanctionable’ courts must ‘resolve all doubts in favor of the signer of the pleading.’ ”) (quoting Rodick v. City of Schenectady, 1 F.3d 1341, 1350 (2d Cir.1993)). Rule 11 motions should not be used “to test the legal sufficiency or efficacy of allegations in the pleadings; other motions are available for those purposes.” Rule 11 Advisory Committee Note (“Advisory Committee Note”) to the 1993 amendments (the “1993 Amendments”).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
252 F.R.D. 175, 71 Fed. R. Serv. 3d 346, 2008 U.S. Dist. LEXIS 58103, 2008 WL 2944624, Counsel Stack Legal Research, https://law.counselstack.com/opinion/e-gluck-corp-v-rothenhaus-nysd-2008.