Tapestry, Inc. v. Chunma USA, Inc.

Background

Tapestry, Inc., Coach Services, Inc., and Coach IP Holdings LLC alleged that Chunma USA, Inc. designed, manufactured, and sold products bearing logos that infringed Coach trademarks, including the “Signature C” mark. The complaint asserted claims under the federal trademark statute, known as the Lanham Act, as well as New York law.

Chunma moved under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim. The motion challenged the Sixth and Seventh Causes of Action, which sought cancellation of three Chunma trademark registrations: U.S. Reg. Nos. 3,567,675, 4,229,549, and 4,577,077.

The Sixth Cause of Action alleged that Chunma fraudulently obtained registration of the ’675 Mark by falsely stating that it had been used in commerce before Chunma filed its application and by mischaracterizing the specimen submitted with the application. The Seventh Cause of Action alleged that Chunma’s marks falsely suggested a connection with the plaintiffs by misrepresenting the source of Chunma’s goods.

Court’s Analysis

The court held that the allegations concerning the ’675 Mark were sufficient to state a cancellation claim. The plaintiffs alleged that Chunma represented that the mark had first been used in commerce by June 18, 2008, even though the complaint alleged that bona fide commercial use did not begin until approximately January 29, 2014. The court concluded that this allegation alone plausibly stated that Chunma made a material misrepresentation in its registration application.

The court also found that the alleged description of the submitted specimen as a “SCANNED ACTUAL TAG,” when it was allegedly only a computer illustration or similar mockup, could constitute another material misrepresentation. Although the complaint cited a later version of the applicable specimen regulation, the court held that the citation error did not require dismissal. It explained that the regulation in effect in 2008, along with the trademark examination manual then in use, did not permit a mere drawing or mockup to serve as the required specimen.

The court rejected Chunma’s argument that the plaintiffs’ claims failed because goods were outside the scope of the relevant statutory provision. The complaint alleged that Chunma’s marks falsely suggested a connection with the plaintiffs themselves, not merely with the plaintiffs’ goods.

The court described the claim concerning the ’549 and ’077 Marks as a close question but allowed it to proceed. A showing that a defendant copied a trademark or used a mark likely to confuse consumers is ordinarily not enough, by itself, to establish misrepresentation of source. The plaintiff must allege specific facts suggesting that the defendant tried to create the impression that the plaintiff was the source of the defendant’s goods.

Here, the court relied on allegations that Chunma sold products bearing studied imitations of Coach’s Signature C mark, acted with reckless disregard, willful blindness, or bad faith, sought to benefit from the mark’s goodwill, and intended to deceive consumers into believing that Chunma was connected with Coach. Images showing close similarities between some products and the plaintiffs’ trademarks also supported an inference that Chunma deliberately sought to pass off its goods as the plaintiffs’ goods. The court cautioned that the plaintiffs ultimately must prove the claim by clear and convincing evidence, and that willful adoption of a similar mark alone would not be enough.

Disposition

The court denied Chunma’s motion to dismiss the Sixth and Seventh Claims for Relief. The Clerk of Court was directed to terminate ECF No. 66. The opinion did not enter judgment on the underlying cancellation claims; it ruled only that the claims were sufficiently pleaded to proceed.

Classification Note

This is a procedural order because the court ruled on a Rule 12(b)(6) motion addressing whether the claims were adequately pleaded, rather than deciding the ultimate merits of the trademark-cancellation claims.