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Famous Horse v 5th Avenue Photo

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Famous Horse, Inc. v 5th Avenue Photo, Inc.

2010 WL 4117673 (C.A.2 (N.Y.))

Facts of the case:
The appellant, Famous Horse, Inc. (“FH”), owns V.I.M., a chain of New York-based clothing stores, that specializes in the sale of name-brand apparel and shoes at discount prices. Appellees, 5th Avenue Photo, Inc. (“5th Ave.”) is a wholesaler who offered to supply several clothing stores, including V.I.M., with Rocawear brand jeans at much lower price than the jeans actual value. In 2006, V.I.M. purchased these jeans from 5th Ave. and soon after discovered the jeans were counterfeits of Rocawear brand jeans. FH stopped selling the jeans, but 5th Ave. continued to sell them to other clothing stores and in the course of establishing new purchasers referenced V.I.M. as a satisfied customer. Upon learning this information, V.I.M. filed a complaint against 5th Ave. asserting several claims under the Lanham Act for trademark violation.

Procedural Posture:
Famous Horse filed its complaint alleging claims under § 32 and § 42(a) of the Lanham Act in the Southern District Court of New York. The district court dismissed FH’s claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failing to state a claim. Thereafter, FH sought leave to amend its complaint twice and was denied both times by the district court. FH appealed.
The district court ruled that “a plaintiff must allege facts establishing, inter alia, that a defendant’s use of plaintiff’s registered mark is likely to cause confusion as to the source of a product” in order to plead a trademark infringement claim under § 32 of the Lanham Act. It also held that in order to plead a false endorsement claim under § 43(a) of the Act, “a plaintiff must demonstrate that there exists a likelihood of confusion between its product and the infringer’s product.” The district court then concluded that Famous Horse’s claims failed under the Lanham Act because it did not “allege any facts establishing consumer confusion as to the source of its own products.”

Holding: The appellate court vacated the district court’s dismissal of Famous Horse’s claims under both § 32 and § 43(a) of the Lanham Act, on the grounds that Famous Horse had trademark rights and claims to infringement for false statements and misrepresentation.

Analysis: The fact that the counterfeit Rocawear jeans sold to Famous Horse by 5th Avenue, Inc. does not bar Famous Horse from bringing trademark violation claims under the Lanham Act. The district court erred in dismissing Famous Horse’s claims under § 32 and § 43(a) for failing “to allege any facts establishing consumer confusion as the source of its products.” Famous Horse, Inc. v. 5th Ave. Photo, Inc., (S.D.N.Y. May 19, 2008). There is nothing that indicates that confusion under either § 32 or § 43(a) be strictly about the origin of goods or services.

Important Dicta: § 32 and § 43(a) under the Lanham Act do not require that the likelihood of confusion be solely determinable by the origin of goods and services. Also, the use of a trademark to falsely portray its owner as a satisfied customer falls within the scope of § 43(a) and a trademark is protected from false endorsement under the Act.

Contributors to this page: Lania .
Page last modified on Wednesday 22 of December, 2010 20:58:59 GMT by Lania.
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