The Fashion Exchange LLC v. Hybrid Promotions, LLC

Background

The Fashion Exchange LLC filed two motions for summary judgment, which asks the court to rule without a trial when no genuine dispute of important fact requires a fact-finder’s decision. One motion sought a renewed ruling on laches and ownership. The other sought judgment on likely customer confusion and liability. Hybrid Promotions, LLC, and the other defendants moved to strike both motions. The court had stayed briefing on the plaintiff’s motions, but briefing later resumed for the motion concerning likely confusion and liability.

The court had previously found factual disputes concerning defendants’ ownership claims. In particular, the plaintiff challenged testimony from Hybrid Promotions’ chief executive officers because they could not recall specific products, retailers, or years connected to use of the marks. The court previously held that those issues concerned witness credibility and therefore had to be resolved by the fact-finder.

Laches and Unclean Hands

The plaintiff argued that defendants should be barred from asserting laches because they had unclean hands. The plaintiff based that argument on defendants’ September 2021 application to the Patent and Trademark Office, claiming the application was fraudulent because defendants allegedly knew the plaintiff had superior rights to the mark.

The court rejected a ruling that defendants’ application established fraud as a matter of law. The court explained that the governing statute requires an applicant to state that the applicant believes no other person has a superior right to use the mark. Defendants had consistently disputed that the plaintiff’s rights were superior and had asserted that their own rights were superior. The court also noted that the plaintiff cited no authority holding that failing to disclose competing claims in an intent-to-use application automatically establishes fraud.

The court distinguished cases involving allegations sufficient to survive a motion to dismiss from a decision proving fraud as a matter of law. It also distinguished cases involving evidence such as an agreement acknowledging another party’s superior claim to a mark. The court concluded that the plaintiff had not met its burden of showing that defendants’ laches defense must be barred as a matter of law.

The court therefore denied the plaintiff’s motion for summary judgment on laches. Because that motion was denied, the court denied as moot in part defendants’ motion to strike it.

Ownership

The plaintiff renewed its request for summary judgment establishing that defendants lacked ownership rights. The plaintiff argued that defendants had received another round of discovery requests since the court’s earlier ruling but had produced nothing additional supporting their ownership claims.

The court held that this did not change the existing evidence or eliminate the factual disputes previously identified. The fact-finder still needed to evaluate the competing facts about ownership. The court therefore granted in part defendants’ motion to strike the plaintiff’s renewed ownership motion because it was redundant, with prejudice.

Likely Confusion and Liability

The court denied in part defendants’ motion to strike the plaintiff’s motion for summary judgment concerning likely confusion and liability. The court directed that briefing on that motion and defendants’ cross-motion for summary judgment proceed under the schedule set by Magistrate Judge Wang, with briefing concluding on February 17, 2023, and no extension of that schedule.

Disposition

The order denied the plaintiff’s motion for summary judgment on laches; denied as moot in part defendants’ motion to strike the laches motion; granted in part defendants’ motion to strike the renewed ownership motion for redundancy, with prejudice; and denied in part defendants’ motion to strike the motion concerning likely confusion and liability.