Coach narrowly alleges grounds for cancellation of similar marks

Tapestry, Inc. v. Chunma USA, Inc., 2021 WL 1534988, No. 20-CV-0271 (JMF) (S.D.N.Y. Apr. 19, 2021)

Tapestry (Coach) sued Chunma for trademark infringement, false designation of origin, false advertising, and cancellation of Chunma’s registered trademarks under the Lanham Act, unfair competition and trademark infringement under New York state common law; and injury to business reputation under New York’s GBL, based on Chunma’s products bearing logos that allegedly infringe upon Coach’s trademarks, including Coach’s well-known “Signature C” mark. Chunma’s motion to dismiss the cancellation claims was denied.  

The claim for cancellation of the ‘675 Mark was based on fraud in obtaining the trademark registration and misrepresentation of source, whereas their claim for cancellation of the ’549 and ’077 Marks was based on misrepresentation of source alone.

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For fraud, Coach alleged that Chunma made a material misrepresentation in its trademark registration application, in particular that the mark was in use as of the application date, when in fact there was no bona fide use until years later. Chunma also allegedly misrepresented the specimen that it submitted alongside its application as a “SCANNED ACTUAL TAG” when, in fact, it was merely a “computer illustration, digital image, or similar mockup” that the PTO would not have accepted.

As for false suggestion of a connection, Coach explicitly alleged that Chunma’s marks “falsely suggest a connection with Plaintiffs.”

However, with respect to the ’549 and ’077 Marks, the misrepresentation of source claim was “a close question.”  “[I]t is well established that “allegations ... of the type that typically support a claim of likelihood of confusion under Section 2(d)” do not suffice to state a claim for cancellation of an incontestable mark based on misrepresentation of source under Section 14(3).” (I note that, looking at TSDR, Coach requested an extension of time to oppose at least one of these marks, but does not seem to have actually opposed them.) “Significantly, even intentional copying of a plaintiff’s trademark does not, standing alone, state a misrepresentation claim.” Instead, a plaintiff must plead “specific facts reflecting [the defendant’s] activity that, if proved, would amount to an attempt to create the impression that [the plaintiff] is the source of [the defendant’s] services” or goods, such as conduct outside use of the registered mark itself.

The complaint did “narrowly” state a claim. Coach pled that Chunma sells “products bearing logos and source-identifying indicia and design elements that are studied imitations of [Plaintiffs’ well-known] Signature C Mark,” with “reckless disregard or willful blindness to Plaintiffs’ rights, and/or with bad faith, for the purpose of trading on the goodwill and reputation of the Signature C Mark” and to “deceive consumers, the public, and the trade into believing that there is a connection or association between [Chunma] ... and [the] Coach” brand. The complaint also showed images showing close similarities between Coach’s trademarks and some of Chunma’s products. Viewed in the light most favorable to plaintiffs, that sufficed for now, though Coach would “ultimately bear a heavy burden to prove this claim by clear and convincing evidence.”

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The subsequent stipulation to a permanent injunction did not cover the registrations, but there is apparently a confidential settlement agreement that may have covered them.