United States District Court, D. Delaware
G. Connolly, III, Ryan P. Newell, Connolly Gallagher LLP,
Wilmington, Delaware, Thomas L. Holt, Jeremy L. Buxbaum,
Perkins Coie LLP, Chicago, Illinois. Attorneys for Plaintiff.
J. Butler, John D. Simmons, Panitch Schwarze Belisario &
Nadel LLP, Wilmington, Delaware, Timothy T. Wang, Ni, Wang
& Massand, PLLC, Dallas, Texas. Attorneys for Defendant.
NOREIKA, U.S. DISTRICT JUDGE
New Balance Athletics, Inc. (“New Balance”) is a
company that manufactures and markets athletic apparel and
footwear. Defendant USA New Bunren International Co. Limited
LLC (“New Bunren”) is a Delaware limited
liability company formed in 2012 for the purpose of
distributing and selling in the United States shoes and other
products made by Qierte Corporation Ltd.
(“Qierte”), a Chinese company that has been found
liable by a Chinese court for infringing New Balance's
trademarks in China.
Balance has asserted claims against New Bunren based on
federal and state law for, among other things, trademark
infringement, trademark dilution, and unfair competition.
Currently pending before the Court are the parties
cross-motions for summary judgment. (D.I. 52; D.I. 54; D.I.
58). Although New Balance has asserted claims based on its
word marks and its “N” marks, the parties seek
summary judgment only as to the “N” marks.”
(D.I. 26; D.I. 58). The Court has subject matter jurisdiction
over this action pursuant to 28 U.S.C. §§ 1332 and
1367. For the following reasons, New Balance's motion for
summary judgment is granted in part and denied in part, and
New Bunren's motions for summary are denied.
Balance was founded in 1906 and first started using its
“N” marks in commerce in 1974. (D.I. 60 ¶ 4;
D.I. 57-1, Ex. I at No. 1). It is now a global company
offering products in more than 120 countries. (D.I. 72-1, Ex.
10 at 17). Defendant New Bunren is a Delaware limited
liability company formed by Shy Fu Pao on July 23, 2012 as
Little Pres. LLC. (D.I. 66 ¶¶ 1-2). The name was
changed to New Bunren on July 28, 2014. (Id.).
New Bunren's “N” Marks.
July 2014 and October 2016, New Bunren registered U.S.
Trademark Nos. 4, 568, 883; 5, 055, 943; 4, 580, 787; 4, 585,
058; 4, 860, 914; and 4, 878, 478 with the U.S. Patent and
Trademark Office. (D.I. 66 ¶ 3). In New Bunren's
trademark applications, the stylized “N” contains
a flying bird design as seen in the images below:
The flying bird design, however, is not always apparent on
New Bunren's products, as shown in the image below:
60 ¶ 3; D.I. 64 ¶ 3; D.I. 72-1, Ex. 9).
to New Bunren, all of its “N” marks are based on
marks successfully registered by Qierte in China. (D.I. 57-1,
Ex. C at No. 1, Ex. D). Shy Fu Pao simply registered
Qierte's “N” marks in the United States.
(Id., Ex. B at 24:18-25:1). Qierte's
“N” marks in China were purportedly an extension
of an earlier stylized mark called “Naiyao”
(reproduced below), wherein the letter “N” was
purportedly designed as a flying bird within the letter
“N.” (Id., Ex. C at No. 1). The parties
do not explain the relationship between Qierte and Naiyao or
whether Naiyao was a company, a product, or something else.
New Balance disputes the details of the Naiyao origin story.
(D.I. 66 ¶ 5).
57-1, Ex. E).
New Bunren's products, Qierte designed and managed a
website for New Bunren with the url
http://www.new-bunren.com. (D.I. 66 ¶ 6; D.I. 57-1, Ex.
B at 89:11-13). The website was active from 2015 to 2017 or
2018, and displayed products bearing New Bunren's
“N” marks. (D.I. 66 ¶ 6; D.I. 57-1, Exs. G,
H). The website prominently described New Bunren as an
“American Classic, ” and captioned one photograph
with the words “New Balance (China) Sports Goods Co.,
Ltd.” (D.I. 57-1, Ex. H). There was no pricing information
or purchasing instructions on the website. (D.I. 66 ¶
6). But it did provide a “contact us” form.
(See D.I. 57-1, Ex. G). In addition, the website at
one point had an Alabama phone number that consumers could
call if they were interested in purchasing the products.
(Id., Ex. B at 116:7-17). Shy Fu Pao resides in
Alabama. (Id. at 8:10-13). New Bunren claims that
none of its products were shipped to or sold in any physical
stores in the United States. (D.I. 66 ¶ 6). Notably,
this leaves open the possibility that its products could have
been sold through the internet and directly shipped to a
STANDARD OF REVIEW
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). The moving party bears the burden of
demonstrating the absence of a genuine issue of material
fact. See Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 n.10 (1986). A party asserting
that a fact cannot be - or, alternatively, is - genuinely
disputed must support its assertion either by citing to
“particular parts of materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those
made for the purposes of the motions only), admissions,
interrogatory answers, or other materials, ” or by
“showing that the materials cited do not establish the
absence or presence of a genuine dispute, or that an adverse
party cannot produce admissible evidence to support the
fact.” Fed.R.Civ.P. 56(c)(1)(A) & (B). If the
moving party has carried its burden, the nonmovant must then
“come forward with specific facts showing that there is
a genuine issue for trial.” Matsushita, 475
U.S. at 587 (internal quotation marks omitted). The Court
will “draw all reasonable inferences in favor of the
nonmoving party, and it may not make credibility
determinations or weigh the evidence.” Reeves v.
Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150
defeat a motion for summary judgment, the non-moving party
“must present more than just bare assertions,
conclusory allegations or suspicions to show the existence of
a genuine issue.” Podobnik v. U.S. Postal
Serv., 409 F.3d 584, 594 (3d Cir. 2005) (internal
quotation marks omitted). However, the “mere existence
of some alleged factual dispute between the parties will not
defeat an otherwise properly supported motion for summary
judgment;” a factual dispute is genuine only where
“the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
“If the evidence is merely colorable, or is not
significantly probative, summary judgment may be
granted.” Id. at 249-50 (internal citations
of the eight claims in its first amended complaint, New
Balance has moved for summary judgment only as to its
“N” marks. (D.I. 26). Those claims are: (i)
infringement of a federally registered trademark under Latham
Act § 32(1), 15 U.S.C. § 1114(1); (ii) trademark
dilution under Lanham Act § 43(c), 15 U.S.C. §
1125(c); (iii) false designation of origin under Lanham Act
§ 43(a), 15 U.S.C. § 1125(a); (iv) trademark
dilution under Delaware statutory law, 6 Del. C. § 3313;
(v) deceptive trade practices under Delaware statutory law, 6
Del. C. § 2532; and (vi) trademark infringement and
unfair competition under Delaware common law. For all of the
federal trademark claims, New Bunren asserts the same
defense, that its activities were not “in
commerce” as required by the statute. Accordingly, the
Court will address this common defense before addressing the
merits of the individual claims. Finally, New Balance has
also moved for summary judgment on its request for statutory
damages and attorneys' fees.
Bunren asserts that its activities were not “in
commerce” as required by the Lanham Act. (D.I. 55 at 6;
D.I. 63 at 8-10, 13). Section 1114 of the Lanham Act, Title
15, United States Code, forbids a party to “use in
commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark in connection with
the sale, offering for sale, distribution, or advertising of
any goods or services on or in connection with which such use
is likely to cause confusion . . . .” (Emphasis added).
Under § 1125(a)(1), a defendant is liable if he or she
uses “in commerce” a mark which: (i)
“is likely to cause confusion . . . as to the origin,
sponsorship, or approval of his or her goods, services, or
commercial activities by another person;” or (ii)
“in commercial advertising or promotion, misrepresents
the nature, characteristics, qualities, or geographic origin
of his or her or another person's goods, services, or
commercial activities.” (Emphasis added). Under §
1125(c), an owner of a famous mark may obtain an injunction
to stop “use of a mark or trade name in
commerce that is likely to cause dilution by blurring or
dilution by tarnishment of the famous mark.” (Emphasis
support of its argument, New Bunren also cites § 1127,
which defines “use in commerce” as follows:
(1) on goods when-
(A) it is placed in any manner on the goods or their
containers or the displays associated therewith or on the
tags or labels affixed thereto, or if the nature of the goods
makes such placement impracticable, then on documents
associated with the goods or their sale, and
(B) the goods are sold or transported in commerce, and
(2) on services when it is used or displayed in the sale or
advertising of services and the services are rendered in
commerce, or the services are rendered in more than one State
or in the United States and a foreign country and the person
rendering the services is engaged in commerce in connection
with the services.
15 U.S.C. § 1127.
appears that the Third Circuit has not yet addressed this
issue, but several courts have held that the definition of
“use in commerce” in § 1127 sets the
standard for a mark to qualify for protection or
registration, not the standard for proving infringement.
See VersaTop Support Sys., LLC v. Georgia Expo,
Inc., 921 F.3d 1364, 1370 (Fed. Cir. 2019) (reversing
district court because the definition of “use in
commerce” in § 1127 “does not apply to
trademark infringement”); BTG Patent
Holdings, LLC v. Bag2Go, GmbH, 193 F.Supp.3d 1310, 1322
(S.D. Fla. 2016) (stating that the definition of “use
in commerce” in § 1127 “applies only in the
trademark qualification context and not in the trademark
infringement context”); Hasbro, Inc. v. Sweetpea
Entm't, Inc., C. A. No. 13-3406 DMG (JCGx), 2014 WL
12586021, at *9 (C.D. Cal. Feb. 25, 2014) (holding that
“Section 1127 is not . . . the legal standard for
proving infringement”); see also Rescuecom Corp. v.
Google Inc., 562 F.3d 123, 131-34 (2d Cir. 2009)
(providing in lengthy dicta an analysis of the statutory text
and historical evolution of the Lanham Act supporting why
§ 1127 applies to trademark qualifications and not
Court finds these cases and, in particular, the analysis set
forth by the Second Circuit in Rescuecom,
persuasive. Notably, the definition of “use in
commerce” under § 1127 cannot be reconciled with
the activities that create liability under §§ 1114
and 1125. Specifically, § 1127 requires that goods be
“sold or transported, ” but §§ 1114 and
1125 create civil liabilities for “offer[s] for
sale” or “advertising, ” which are
activities where goods are not necessarily sold or
transported. Section 1127 states that the definitions in that
section apply, “unless the contrary is plainly apparent
from the context.” The context of ...