Lontex Corp. v. Nike, Inc.

384 F. Supp. 3d 546
CourtDistrict Court, E.D. Pennsylvania
DecidedJune 10, 2019
DocketCIVIL ACTION NO. 18-5623
StatusPublished
Cited by15 cases

This text of 384 F. Supp. 3d 546 (Lontex Corp. v. Nike, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lontex Corp. v. Nike, Inc., 384 F. Supp. 3d 546 (E.D. Pa. 2019).

Opinion

Baylson, District Judge.

I. Introduction

In this case, Plaintiff Lontex Corporation ("Lontex") alleges that Defendant Nike, Inc. ("Nike") committed trademark infringement in violation of the Lanham Act and state law by selling athletic apparel with Lontex's registered "COOL COMPRESSION" mark without authorization. The First Amended Complaint (ECF 20, "FAC") alleges five Counts:

1. Count I : Trademark infringement under the Lanham Act, 15 U.S.C. § 1114 ;
2. Count II : Trademark infringement under the Lanham Act, 15 U.S.C. § 1125(a) ;
3. Count III : Contributory trademark infringement under the Lanham Act, 15 U.S.C. §§ 1114, 1125(a) ;
4. Count IV : Trademark infringement under the common laws of California, Florida, Texas, New York, New Jersey, North Carolina, Maryland, Massachusetts, Illinois, Georgia, Colorado, Minnesota, Washington, and the District of Columbia; and
5. Count V : Statutory trademark infringement and unfair competition under the laws of Florida, California, New York, New Jersey, North Carolina, Massachusetts, Illinois, Georgia, Colorado, Minnesota, and Washington.

Presently before this Court is Nike's Partial Motion to Dismiss the counterfeiting claims in Counts I and III of the FAC under Federal Rule of Civil Procedure 12(b)(6). (ECF 23, "MTD.") Lontex's request to amend the FAC, to which Nike has objected, is also pending. In the Response in opposition to the Motion, Lontex *549argues that the Court should permit Lontex to amend the FAC. (ECF 24, "Resp." at 21-22.) At oral argument on the Motion, the Court raised the possibility of amending the FAC to remove allegations of counterfeiting in Counts I and III and add a separate claim for counterfeiting as Count VI. (ECF 32, 33.)1 Following oral argument, the parties filed a Joint Submission in which Lontex agreed to the Court's proposal, Nike objected, and Lontex attached a proposed counterfeiting claim as Exhibit 1 ("Proposed Claim"). (ECF 34; id. Ex. 1.)

For the reasons discussed below, the Court reaches the following conclusions:

1. The Partial Motion to Dismiss is GRANTED, with prejudice; and
2. Lontex's request to amend the FAC is DENIED.

II. Factual Background

Taking Lontex's allegations as true, the factual background is as follows. Lontex, a Pennsylvania corporation, has been providing professional and collegiate sports teams with athletic apparel since 1989. (FAC ¶¶ 4, 10.) By 2006, Lontex was well-regarded, including amongst the National Football League, collegiate sports teams, and sports medicine doctors. (Id. ¶ 10.) As early as June 18, 2007, Lontex launched its COOL COMPRESSION line of clothing, including compression shirts, shorts, tights, and socks. (Id. ¶ 1.)

On April 22, 2008, Lontex's "COOL COMPRESSION" trademark was registered by the United States Patent and Trademark Office ("USPTO") for a variety of men's, women's, and children's clothing. (Id. Ex. A.)2 The trademark consisted of "standard characters without claim to any particular font, style, size, or color." (Id. )

On the same day, the USPTO registered Lontex's design mark, below, for the same category of clothing. (Id. )

The following year, on April 28, 2009, the USPTO registered Lontex's COOL COMPRESSION trademark for compression supports for medical use, including compression sleeves, tights, and leggings. (Id. )3 None of the trademarks gave Lontex the exclusive right to use "Compression" apart from "COOL COMPRESSION." (Id. )

Lontex has since sold millions of dollars of COOL COMPRESSION apparel and compression supports across the United States, representing over 40,000 COOL COMPRESSION goods covered by the trademarks. (Id. ¶ 17.) Lontex's COOL COMPRESSION line is popular throughout the country among customers, including professional sports teams. (Id. ¶ 10.) COOL COMPRESSION goods have been promoted through a variety of distribution channels, including direct-to-consumer websites, doctor and medical referrals, sports organizations, and speaking engagements by Lontex staff. (Id. )

Nike is an Oregon corporation with its principal place of business in Beaverton, Oregon. (Id. ¶ 5.) On or about January 2016, Lontex discovered that Nike had been selling apparel under the COOL

*550COMPRESSION trademark since at least October 2015. (Id. ¶ 19.)4 Nike has been using COOL COMPRESSION as its product mark next to its separate house mark "NIKE PRO." (Id. ¶ 20.) For example, a sample Nike catalogue listed six COOL COMPRESSION clothing items, including "728044 NIKE PRO COOL COMPRESSION SLEEVELESS TOP." (Id. ) Nike's products have also been advertised, promoted, and sold using the COOL COMPRESSION product mark without "NIKE PRO" or any other Nike house mark near or next to it. (Id. ¶ 23.)

Nike's COOL COMPRESSION items were placed in Nike catalogues, including baseball, basketball, football, and training catalogues. (Id. ¶ 24.) In addition to selling COOL COMPRESSION products direct-to-consumers, Nike has sold and distributed this allegedly infringing athletic apparel to its authorized distributors, resellers, and retailers, including REI, Target, Macy's Zappos, Dick's Sporting Goods, East Bay, Foot Locker, and Amazon (hereinafter, "Prohibited Intermediaries"). (Id. ¶¶ 26-27.) Nike has also monitored promotional advertising with respect to its use of COOL COMPRESSION. (Id. ¶ 26.) Neither Nike nor these Prohibited Intermediaries have authorization or approval to sell COOL COMPRESSION products. (Id. ¶¶ 28-29, 34.) Though Nike "indicated" that it would cease use of the COOL COMPRESSION mark after a "demand letter identifying the infringement of the registered COOL COMPRESSION mark was sent," Nike's catalogues and sales through the Prohibited Intermediaries continued to make use of the COOL COMPRESSION mark. (Id. ¶¶ 26, 47.)5 Nike has made over $ 40 million in estimated profits on its COOL COMPRESSION line of products. (Id. ¶ 35.)

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384 F. Supp. 3d 546, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lontex-corp-v-nike-inc-paed-2019.