Merit Diamond Corp. v. Frederick Goldman, Inc.

376 F. Supp. 2d 517, 78 U.S.P.Q. 2d (BNA) 1277, 2005 U.S. Dist. LEXIS 14271, 2005 WL 1660843
CourtDistrict Court, S.D. New York
DecidedJuly 13, 2005
Docket05 Civ. 5164(VM)
StatusPublished
Cited by1 cases

This text of 376 F. Supp. 2d 517 (Merit Diamond Corp. v. Frederick Goldman, Inc.) 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
Merit Diamond Corp. v. Frederick Goldman, Inc., 376 F. Supp. 2d 517, 78 U.S.P.Q. 2d (BNA) 1277, 2005 U.S. Dist. LEXIS 14271, 2005 WL 1660843 (S.D.N.Y. 2005).

Opinion

DECISION AND ORDER

MARRERO, Judge.

Plaintiff Merit Diamond Corporation (“Merit”) alleges that Frederick Goldman, Inc. (“Goldman”), a jewelry manufacturer, as well as two retailers of products manufactured by Goldman, BJ’s Wholesale Club (“BJ’s”) and Kohl’s Corporation (“Kohl’s”) (collectively, “Defendants”), infringed Merit’s copyright for a three-stone pendant design (the “Three Stones pendant”). Merit claims that two different pendants produced by Goldman, one sold by Kohl’s (the “Kohl’s pendant”) and another sold by BJ’s (the “BJ’s pendant”), impermissibly mimic its copyrighted design.

Merit has moved for a preliminary injunction prohibiting Defendants from manufacturing or selling these allegedly infringing products, an order of recall of existing inventory, and an order of seizure requiring Goldman to surrender molds and devices used to manufacture the offending goods. The Court held a hearing on Merit’s motion on July 7, 2005, at which Abraham “Gagi” Kaplan (“Kaplan”), Merit’s Chief Executive Officer and designer of the Three Stones pendant, testified.

Because Merit appears likely to demonstrate that Goldman’s products infringe its copyright, the Court grants a preliminary injunction- prohibiting Defendants from manufacturing, distributing, or selling the allegedly infringing products. It also determines that'an order of recall would be equitable in this case, due to the approximately 1000 stores nationwide that would be in a position to continue selling the challenged items absent the recall order. By reason of the expense associated with a recall, however, Merit will be required to post a substantial bond to cover the cost of a recall in the event that it does not succeed on the merits. Merit has not explained why an order of seizure would be necessary to protect its rights, however; consequently, the Court declines to order this intrusive remedy at this stage of the proceedings.

I. BACKGROUND

A. FACTS

Merit designs, manufactures, and sells diamond and gemstone jewelry products, including, but not limited to, pendants and pendant necklaces set with diamonds. It owns United States Copyright Registration Number VA1208635 for the Three Stones pendant. The Three Stones pendant has six features that Merit alleges make it original and worthy of copyright protection: (1) three round, brilliant cut single diamonds; (2) a precious metal “helix” of three clockwise turns; 1 (3) mount *520 ing of the diamonds between the turns of the “helix”; (4) tapered, top and end portions of the “helix”; (5) polished inner and outer surfaces of the precious metal “helix”; and (6) the polishing of the inner surface to create a' mirrored effect of the diamonds in their settings. (Memorandum of Law in Support of Plaintiffs Motion for a Preliminary Injunction, Pursuant to -Federal Rule of Civil Procedure 65(a) and 17 U.S.C. § 502, and an Order of Seizure, of Any Manufacturing Molds and Devices and Recall of Infringing Items, Pursuant to. 17 U.S.C. § 503, dated June 16, 2005 (“Merit Mem.”) at 2.) Merit alleges that, it has sold this product through several retail jewelry outlets such as Zales, J.C. Penney, and others, and that it has exhibited the pendant through trade shows, vendor catalogs, and other vehicles, since January 2003, at the latest.

Merit’s Complaint alleges that Defendants have-been manufacturing or selling the infringing pendants since at least January 2005. In their opposition papers, Defendants assert that the process of designing the competing pendants began in February 2004, shortly after the Three Stones pendant entered the market. 2 According to Stephanie Occhipinti (“Occhi-pinti”), designer of the allegedly infringing pendants, she developed the design after Goldman’s director of merchandising, Me-ryl Besen (“Besen”) requested that she create a three-stone pendant due to the alleged popularity of this design in the retail trade. • (Declaration of Stephanie Occhipinti, dated June 25, 2005 (“Occhipin-ti Decl.”),H11.) Occhipinti. states that she began the design process by first “review[ing] numerous catalogues and other sources to see what was. out in the marketplace in terms of style, price point, and stone weight, etc.” (Id.) -She insists, however, that she “did not copy or ‘knock off the Merit three-stone'pendant in designing the Goldman three-stone pendant.” (Id.) Besen states that she does not recall whether she was aware of Merit’s Three Stones pendant at the time she asked Oc-chipinti to design a new pendant, but insists that she “would never direct or request Ms. Occhipinti or any designer to ‘knock-off or copy any design, nor would I ever expect Ms. Occhipinti, who is highly regarded as a designer in the industry, to ever ‘knock-off any design.” (Declaration of Meryl Besen, dated June 26, 2005 (“Be-sen Deck”) ¶ 17.) Rather, both Occhipinti and Besen insist that the Goldman pendant design was based on designs of rings *521 previously produced by Goldman. (Id. ¶ 16; Occhipinti Decl. ¶¶ 12-13.) 3

An initial comparison of the two designs reveals that the Goldman pendant, in both Kohl’s and BJ’s variations, appears similar to the Three Stones pendant. All three are of essentially identical size. 4 Each combines three round, brilliant single cut diamonds, a precious metal “helix” or S-curve of three turns, and tapered top and bottom portions, and the inner and outer surfaces of the “helix” are polished in a manner that creates a mirrored effect of the diamond in its setting.

Defendants contend that there are several important differences between the designs of the Three Stones pendant and the Goldman pendant. Occhipinti asserts that “[f|rom a jewelry design standpoint, [the Three Stones pendant] is a totally different piece from the Goldman three-stone pendant.” (Occhipinti Decl. ¶ 14.) Occhi-pinti claims that the Goldman pendant design has a more rounded style than the Three Stones pendant; the bales of the two pendants have different orientations and appearances; 5 and the Goldman pendant design “has a more linear look to it” than that of the Three Stones pendant. (Id.) Besen also claims that the stones in the Three Stones pendant and the Goldman pendant are set through different techniques: while the stones in the Three Stones pendant are “channel set,” which is accomplished by -hammering the precious metal on top of the stone to secure it, the stones in the Goldman pendant are “nick set,” which is accomplished by “carving out a piece of precious metal and fitting the diamond into the rut that has been carved out.” (Besen Decl. ¶ 9.) 6

B. PROCEEDINGS

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376 F. Supp. 2d 517, 78 U.S.P.Q. 2d (BNA) 1277, 2005 U.S. Dist. LEXIS 14271, 2005 WL 1660843, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merit-diamond-corp-v-frederick-goldman-inc-nysd-2005.