APP Group Inc. v. Rudsak USA Inc.

Background

APP Group (Canada) Inc. and A.P.P. Group Inc., collectively called “Mackage” in the opinion, own and operate the Mackage fashion label. Mackage alleged that Rudsak produced and sold coats that copied Mackage’s claimed product-design trade dress: a V-shaped fur collar or hood and/or an asymmetrical zipper. Mackage alleged that it had used these features in the American market since at least August 2007 and that its designs appeared in stores, advertising, magazines, websites, and social-media coverage.

Mackage asserted claims for federal trade dress infringement and dilution under 15 U.S.C. § 1125, New York trade dress dilution under General Business Law § 360-l, deceptive business practices under General Business Law §§ 349 and 133, and New York common-law unfair competition. Rudsak moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. Mackage opposed the motion.

Trade Dress Infringement

The court treated Mackage’s claim as one involving product-design trade dress because the alleged features concerned the coats themselves. To plead this type of claim, Mackage had to describe the claimed design precisely and allege facts supporting its distinctiveness, non-functionality, secondary meaning, and likely consumer confusion.

The court found the description inadequate. The complaint did not clearly identify whether the trade dress consisted of the V-shaped collar or hood, the asymmetrical zipper, or both together. It also did not provide a stable, specific list of design features or explain what made those features distinctive compared with similar collars and zippers on competing coats. The photographs attached to the complaint did not cure this problem because some showed coats lacking one or more of the alleged features, and images alone did not identify the distinctive elements of the claimed trade dress.

The court also found that Mackage had not adequately pleaded secondary meaning. Secondary meaning exists when consumers primarily understand a product feature as identifying its source rather than merely describing the product. Although Mackage alleged publicity and media coverage, the court found that the materials did not specifically connect the V-shaped collar or asymmetrical zipper to Mackage. The complaint also did not address advertising expenditures, consumer surveys, or sales success.

The court further held that Mackage had not plausibly alleged that the claimed trade dress was non-functional. Mackage’s allegations that the features were “non-functional” and had no utility were conclusory and lacked supporting facts. Because Mackage failed to adequately describe the trade dress and plead secondary meaning and non-functionality, the court held that it failed to state a trade dress infringement claim.

Trade Dress Dilution

The court held that Mackage also failed to plead federal and New York trade dress dilution. A dilution claim required allegations that the trade dress was truly distinctive or had acquired secondary meaning and that Rudsak’s conduct was likely to cause dilution. The federal claim additionally required a showing that the trade dress was widely recognized by the general consuming public in the United States.

The court found that Mackage did not allege advertising budgets, sales figures, or recognition by a sufficiently broad group of consumers. The cited media descriptions did not establish the level of general-public fame required for federal dilution. Because Mackage had not adequately pleaded a distinctive trade dress or secondary meaning, the New York dilution claim also failed.

Remaining Claims

The court held that the unfair-competition claim failed because Mackage had not adequately alleged a protectable mark. The claim under New York General Business Law § 349 failed because Mackage did not allege a specific and substantial injury to the public interest beyond ordinary trademark infringement or dilution. The claim under § 133 failed because the complaint did not allege facts supporting an inference that Rudsak acted in bad faith to deceive the public.

Disposition

Judge Caproni granted Rudsak’s motion to dismiss as to all counts. The court dismissed the case with prejudice and directed the Clerk of Court to terminate any open motions and close the case. The court stated that amendment would be futile because Mackage had not been able to describe a legally protectable trade dress in either its complaint or its opposition brief.