Amarte USA Holdings, Inc. v. Kendo Holdings Inc.

Background

Amarte sells skin-care products, including EYECONIC eye cream, and has owned a federal registration for the standard-character mark “EYECONIC” covering eye cosmetics and eye creams since 2013. The defendants manufactured or sold the MARC JACOBS BEAUTY EYE-CONIC eye shadow. Amarte alleged a likelihood of confusion and asserted federal trademark infringement, federal unfair competition, common-law trademark infringement, common-law passing off and unfair competition, and California statutory unfair competition.

The parties filed cross-motions for summary judgment. Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law. Defendants also asserted a counterclaim seeking cancellation of Amarte’s trademark registration. The court did not adjudicate that counterclaim because defendants did not move for summary judgment on it.

Likelihood of Confusion

The court applied the eight factors used in the Ninth Circuit to assess likelihood of confusion:

1. Strength of Amarte’s mark. The court found EYECONIC suggestive because it takes some imagination to connect the term with eye cream. It was therefore inherently distinctive but presumptively weak. The court also found weak commercial strength, citing the limited sales evidence and the absence of identified advertising expenditures sufficient to establish marketplace recognition. This factor favored defendants.

2. Relatedness of the goods. The court found that anti-aging eye cream and colorful eye shadow had different uses and targeted different consumers. Amarte did not provide evidence showing that consumers would necessarily use the products together. This factor favored defendants.

3. Similarity of the marks. Although both marks used “EYECONIC,” the court considered the products as they appeared in the marketplace. Amarte’s product prominently displayed the “amarte” housemark on a narrow white-and-gold tube, while defendants’ product prominently displayed “MARC JACOBS” on different packaging and a flat eye-shadow palette. The defendants’ mark also separated “EYE” and “CONIC” with a hyphen. The court found the marks dissimilar, and this factor strongly favored defendants.

4. Actual confusion. Amarte had no evidence of consumers being confused while the products were sold at the same time. Amarte did submit a 2023 expert survey reporting 24% to 38% net confusion, after defendants had stopped selling the eye shadow. The court treated the survey as some evidence of confusion but found it insufficient to overcome the absence of reported marketplace confusion during the products’ simultaneous sale. This factor was neutral.

5. Marketing channels. Defendants sold the eye shadow through luxury retailers, Marc Jacobs boutiques, and the Marc Jacobs Beauty website. Amarte sold its eye cream through a dermatology practice, independent salons and spas, specialist online dermatology marketplaces, and Amazon. The court found the channels did not overlap. This factor favored defendants.

6. Purchaser care. The court found that Amarte’s repeated descriptions of its clientele as high-end and its product as very expensive supported an expectation that buyers would exercise greater care. This factor favored defendants.

7. Intent. The court considered Amarte’s evidence concerning product samples, the trademark registration, a disputed meeting involving Sephora representatives, and defendants’ handling of remaining inventory after the cease-and-desist letter. The court found that none of this evidence would allow a reasonable jury to conclude that defendants intended to capitalize on Amarte’s trademark. This factor was neutral.

8. Expansion into other markets. Amarte argued that a possible relaunch of the Marc Jacobs Beauty line could lead to future sales through Amazon. The court found that this evidence was speculative and did not establish a strong possibility that defendants would use the name EYE-CONIC on future products. This factor favored defendants.

Because all of the factors either favored defendants or were neutral, the court held that no reasonable juror could find a likelihood of confusion between the marks.

Claims and Disposition

The court held that likelihood of confusion was required for Amarte’s federal trademark-infringement claim, federal unfair-competition claim, common-law trademark-infringement claim, and common-law passing-off and unfair-competition claim. Because no reasonable juror could find likely confusion, the court granted defendants summary judgment on those claims. The court also granted defendants summary judgment on Amarte’s California statutory unfair-competition claim because defendants’ conduct did not violate the underlying trademark or unfair-competition laws.

The court therefore granted defendants’ motion for summary judgment and denied Amarte’s motion for summary judgment.

Other Motions

The court denied Amarte’s motions to exclude defendants’ experts Brian M. Daniel and John R. Hauser as moot. The court denied as moot defendants’ motion to strike Amarte’s jury demand because Amarte’s claims would not proceed to trial. The court granted defendants’ motion to strike Kendo’s own jury demand on its trademark-cancellation counterclaim, holding that the cancellation claim was equitable in nature and did not carry a right to a jury trial.

Final Order

Judge Charles Breyer granted defendants’ motion for summary judgment, denied Amarte’s motion for summary judgment, denied as moot defendants’ motion to strike Amarte’s jury demand, denied as moot Amarte’s motions to exclude defendants’ experts, and granted defendants’ motion to strike Kendo’s jury demand on its cancellation counterclaim.