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Pleading that the term “Cantamessa” is well-known among those who consume expensive jewelry is insufficient to maintain a claim of trademark dilution, which requires that a mark be “famous,” or recognized by the general public, not just a niche group of consumers, the U.S. District Court for the Southern District of New York ruled July 31 (Helios Int'l S.A.R.L. v. Cantamessa USA, Inc., S.D.N.Y., No. 1:12-cv-08205-RWS, 7/31/13).
Dismissing trademark dilution claims, the court however found that the plaintiff's complaint had adequately pleaded facts to avoid dismissal of claims of misappropriation of trade secrets and conspiracy to counterfeit.
In 1939, the Cantamessa family of Valenza, Italy, began producing jewelry for royalty and the business was successful until the early 2000s. In 2004, Cantamessa s.r.l. declared bankruptcy and the grandson of the founder of Cantamessa s.r.l., Fabrizio Cantamessa, was sentenced for fraud.
In 2007, Idea Italiana s.r.l. acquired Cantamessa s.r.l.'s assets, including its copyrights and trademarks. In 2009, Helios International S.a.r.l. of Tunisia became an exclusive distributor of Idea's Cantamessa jewelry.
Helios then established a relationship with Fabrizio Cantamessa, whereby he would serve Helios in the areas of sales and marketing. Subsequently, Robert Kheit also became a sales and marketing agent for Helios.
In 2010, Fabrizio Cantamessa and Kheit established Cantamessa USA Inc. and began marketing Cantamessa jewelry, taking inventory from the Helios warehouse. However, they did not remit the revenues back to Helios as required by their contracts. Cantamessa USA also filed trademark registration applications with the U.S. Patent and Trademark Office and the E.U. Trademark and Designs Office covering the trademarks owned by Idea.
After Helios discovered the missing inventory, it cancelled its contracts with Fabrizio Cantamessa and Kheit, who were then arranging to have a factory in Thailand produce copies of the Cantamessa jewelry designs.
Helios sued Cantamessa USA Inc., Fabrizio Cantamessa, and Robert Kheit, alleging criminal copyright infringement, trademark infringement, trademark dilution, and false designation of origin under federal law. Helios also sought cancellation of Cantamessa's trademark registration. Further, Helios brought claims under state law for trademark infringement, misappropriation of trade secrets, unfair competition, and several other theories of liability, including racketeering, fraud, and breach of fiduciary duty.
Cantamessa USA moved for dismissal of the copyright, trademark dilution, and trade secrets claims and other state claims under Fed. R. Civ. P. 12(b)(6) for failure to state a claim for which relief is available under the law.
Judge Robert W. Sweet first rejected Helios's claim of criminal copyright infringement, finding that Cantamessa USA's actions were more appropriately classified under breach of contract or breach of fiduciary duty claims. To the extent that a criminal copyright infringement claim could also support a claim of racketeering, the court said that the alleged actions were not sufficiently “egregious.”
There was also insufficient pleading to support a claim of trademark dilution, the court said, on the basis that Helios had failed to establish that the Cantamessa trademarks were “famous,” that is, that they were “widely recognized by the general consuming public of the United States.”
It was not sufficient for Helios to claim that the marks were well known “among consumers of luxury jewelry,” the court said. This was the kind of “niche fame” that was rejected as a basis for a federal dilution claim by Luv N' Care, Ltd. v. Regent Baby Prods. Corp., 841 F. Supp. 2d 753, 103 U.S.P.Q.2d 1243 (S.D.N.Y. 2012).
However, the court found that Helios's pleadings had sufficiently stated a claim for misappropriation of trade secrets under New York state law. Helios's trade secrets claim included “proprietary business information,” including “proprietary jewelry designs [and] molds … products, formulations, industrial processes, internal corporate documents, planning and strategy documentation, financial and accounting information, customer contact lists and information, [and] supplier contact lists and information.”
The court found that there was also sufficient pleading that Helios had taken steps to protect such information.
However, to the extent that Helios was also claiming the jewelry designs as trade secrets, the claims were dismissed. The court found that the designs were available to the public and thus could not be protected as trade secrets.
Finally, the court found that Helios could pursue claims under the N.Y. Consumer Protection Act, N.Y. Gen. Laws §349, based on the allegations that Cantamessa USA were preparing to sell counterfeit Cantamessa jewelry made in the Thai factory.
Helios was represented by Carl W. Oberdier of Oberdier Ressmeyer, New York. Cantamessa USA was represented by J. Christopher Jensen of Cowan, Liebowitz & Latman, New York.
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