Solid 21, Inc. v. Richemont North America, Inc.

Background

Solid 21, Inc. alleged that the defendants infringed its RED GOLD trademark, used on its watches and jewelry. After an earlier motion to dismiss, the remaining defendants were Richemont North America, Inc. (RNA), Richemont International S.A. (RISA), and Montblanc-Simplo GmbH. Solid 21’s remaining claims included direct and contributory trademark infringement, unfair competition, trademark dilution, and false description under the federal Lanham Act, along with related New York-law claims. The defendants asserted counterclaims seeking invalidation and cancellation of Solid 21’s mark.

The parties filed cross-motions for summary judgment. Summary judgment is a decision without a trial that is appropriate only when the evidence shows no genuine dispute about an important fact and the moving party is entitled to judgment under the law.

Validity and genericness

The defendants argued that RED GOLD was generic and therefore invalid because “red gold” commonly refers to a type of gold alloy. They relied on expert reports, historical references, dictionaries, evidence of industry usage, and consumer surveys. Solid 21 offered competing expert opinions, survey evidence, and declarations supporting its position that consumers understand RED GOLD as a brand rather than as the common name of an alloy.

The court held that the conflicting evidence created a factual dispute that could not be resolved on summary judgment. It therefore denied the defendants’ motion for summary judgment on Solid 21’s trademark claim based on genericness and denied the defendants’ motion on their invalidity counterclaims. The court also denied Solid 21’s motion, which argued that the defendants’ genericness challenge failed as a matter of law.

Likelihood of confusion

The court separately denied the defendants’ motion on the infringement claim because a reasonable jury could find that their use of “red gold” was likely to confuse consumers about the source of the products. Applying the eight-factor test used in the Second Circuit, the court identified factual disputes concerning the strength of Solid 21’s mark, whether the mark had acquired public recognition as identifying Solid 21’s products, the similarity of the marks, and the proximity of the parties’ luxury-watch products.

The court noted that the defendants used the same words, “red gold,” as Solid 21’s mark. It also found that a jury could weigh the parties’ competing evidence differently regarding the defendants’ use of the term, the sophistication of luxury-watch buyers, and whether the defendants acted in bad faith. The court found no jury question concerning actual confusion because Solid 21 had not identified evidence of any actual-confusion witness, but it explained that actual confusion was not required to prove likely confusion.

Fair-use defense

The defendants also sought summary judgment on their fair-use defense. Fair use permits a defendant to use a trademark term descriptively rather than as a brand, but the defendant must show that the term was used other than as a mark, in a descriptive sense, and in good faith.

The court denied summary judgment because factual disputes existed on all three requirements. The parties disagreed about the meaning and presentation of the defendants’ marketing materials, including whether the term appeared as a product description or was used in a way that could create an association with Solid 21’s mark. They also disputed whether “red gold” was descriptive of an alloy and whether the defendants’ later change from “red gold” to “pink gold” supported an inference of bad faith. The court stated that a jury could find fair use in some instances, but the evidence was not conclusive for all uses.

Intracompany sales and disposition

The defendants sought to exclude from liability sales from RISA and Montblanc-Simplo GmbH to their U.S. affiliate, RNA. Solid 21 conceded that RNA could not be confused about the source of those transactions. The court therefore granted the defendants’ motion for summary judgment as to those intracompany sales.

The court stated that Solid 21’s dilution claim was dismissed. In its conclusion, the court held that the defendants’ motion for summary judgment was granted in part and denied in part: it was granted as to the intracompany sales and otherwise denied. Solid 21’s motion for summary judgment was denied. The defendants’ motion for oral argument was denied as moot. The opinion does not state whether the dilution claim was dismissed with or without prejudice.