Opinion
Nos. 96 Civ. 9721 (PKL) (THK), 98 Civ. 0123 (PKL) (THK), 01 Civ. 9645 (PKL) (THK).
January 12, 2006.
ATTORNEYS OF RECORD
David E. Jacoby, Esq. Elizabeth A. Adinolfi, Esq. (on briefs) PHILLIPS, NIZER, BENJAMIN, KRIM BALLON LLP New York, New York, Attorneys for Plaintiff Gianni Versace S.p.A.
Leonard Zack, Esq. LEONARD ZACK ASSOCIATES New York, New York. Attorney for Defendant Alfredo Versace.
OPINION AND ORDER
This Court once again has fresh occasion to take up the unremitting litigation between Gianni Versace S.p.A. ("Gianni") and Alfredo Versace ("Alfredo"). On January 24, 2005, the Court issued an Opinion and Order granting Gianni's request for the entry of a permanent injunction against Alfredo similar in all material respects to the modified preliminary injunction that has been in force since January 27, 2003 (the "Modified Preliminary Injunction"), and directing Gianni to submit a proposed permanent injunctive order. See A.V. By Versace, Inc. v. Versace, Nos. 96 Civ. 9721, 98 Civ. 0123, 01 Civ. 9645, 2005 WL 147364, at *8 (S.D.N.Y. Jan. 24, 2005). Today the Court signed the permanent injunction (the "Permanent Injunction").
In the interim, Alfredo has moved to amend the Modified Preliminary Injunction to allow Alfredo the right to use his name in the sale of commercial products exclusively marketed outside the United States and not presently sold by Gianni. For the reasons set forth herein, Alfredo's motion is denied as moot.
BACKGROUND
1. The Consolidated Actions
The Court presumes familiarity with its numerous prior decisions in these consolidated actions, and will discuss their factual background only to the extent necessary for the disposition of the present motion. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 01 Civ. 9645, 2005 WL 147364 (S.D.N.Y. Jan. 24, 2005); A.V. By Versace, Inc. v. Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2004 WL 691243 (S.D.N.Y. Mar. 31, 2004); Gianni Versace, S.p.A. v. Versace, No. 01 Civ. 9645, 2003 WL 22023946 (S.D.N.Y. Aug. 27, 2003); Gianni Versace, S.p.A. v. Versace, No. 01 Civ. 9645, 2003 WL 470340 (S.D.N.Y. Feb. 25, 2003); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2002 WL 2012618 (S.D.N.Y. Sept. 3, 2002); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 191 F. Supp. 2d 404 (S.D.N.Y. 2002);A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 160 F. Supp. 2d 657 (S.D.N.Y. 2001); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 126 F. Supp. 2d 328 (S.D.N.Y. 2001); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 87 F. Supp. 2d 281 (S.D.N.Y. 2000); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., No. 96 Civ. 9721, 1998 WL 832692 (S.D.N.Y. Dec. 1, 1998); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., No. 96 Civ. 9721, 1997 WL 31247 (S.D.N.Y. Jan. 28, 1997).
This litigation consists of three separate actions, which have been consolidated by the Court. It began in December 1996, when A.V. By Versace ("A.V."), a corporation that claimed to hold a license to use certain Versace trademarks, commenced an action seeking injunctive relief and damages against Gianni and Alfredo after Gianni had sent a cease and desist letter to one of A.V.'s vendors. A.V. By Versace, 1997 WL 31247, at *1. Gianni subsequently cross-claimed against Alfredo for a declaration regarding the manner in which Alfredo could use the Versace surname in the future. See A.V. By Versace, 1998 WL 832692, at *1. In January 1998, Gianni filed a separate lawsuit against Alfredo and Foldom International (U.S.A.), Inc. ("Foldom"), alleging trademark infringement, unfair competition, and trademark dilution. The Court consolidated the 1996 and 1998 actions in December 1998. See id. at *3.
Gianni initiated the third and final action on November 1, 2001. In that case, Gianni alleged trademark infringement against Alfredo, L'Abbigliamento, Ltd. ("L'Abbigliamento"), and Esrim Ve Sheva Holding Corporation, in connection with the sale and promotion of a clothing line and watches. Gianni negotiated a settlement with Esrim Ve Sheva Holding Corporation and moved for summary judgment against Alfredo and L'Abbigliamento. See Gianni Versace, S.p.A. v. Versace, No. 01 Civ. 9645, 2003 WL 22023946, at *1, 4 (S.D.N.Y. Aug. 27, 2003). On August 27, 2003, the Court granted Gianni's motion with respect to certain claims in so far as they sought injunctive relief, but denied summary judgment for monetary damages. See id. at *15. Most recently, on January 24, 2005, the Court (1) consolidated the third action with the two previously consolidated earlier actions; (2) entered default judgments against Alfredo in the first two actions; and (3) granted Gianni's request for the entry of a permanent injunction against Alfredo that would be similar in all material respects to the Modified Preliminary Injunction currently in force. See A.V. By Versace, Inc. v. Versace, Nos. 96 Civ. 9721, 98 Civ. 0123, 01 Civ. 9645, 2005 WL 147364, at *15 (S.D.N.Y. Jan. 24, 2005).
II. The Preliminary Injunction
On February 4, 1998, Judge Sidney H. Stein granted Gianni's request for a preliminary injunction against Alfredo Versace, issuing his decision from the bench. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 87 F. Supp. 2d 281, 284 (S.D.N.Y. 2000) (noting that Judge Stein issued his decision from the bench and then issued the preliminary injunction in writing on February 10, 1998). The preliminary injunction entered by Judge Stein (the "Preliminary Injunction") barred Alfredo from, inter alia, using or licensing the use of various "Infringing Marks" that incorporated the name "Versace" as well as the use of any other trademarks confusingly similar to those of Gianni. (See Prelim. Inj., ¶¶ 6-8, Feb. 10, 1998.) Although the injunction enjoined Alfredo from using his name as a trademark, it allowed him to use his name to identify goods that he had designed by use of the phrase "Designed by Alfredo Versace" as long as such goods prominently displayed the following disclaimer: "not affiliated with or authorized by Gianni Versace S.p.A." (Prelim. Inj. ¶¶ 6-10.) The Preliminary Injunction also prohibited Alfredo Versace from delegating or licensing his rights to a middleman. However, it allowed manufacturers and distributors to use the name "Alfredo Versace" in accordance with the Preliminary Injunction, provided that they first agreed in writing to be bound by the Preliminary Injunction. (See Prelim. Inj. ¶ 13.)
III. The Extraterritorial Application of the Preliminary Injunction
Before Judge Stein signed the Preliminary Injunction, both Gianni and Alfredo submitted letter briefs and proposed orders arguing their respective positions on the issue of the Court's power to enjoin Alfredo and defendant Foldom's activities abroad.See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 126 F. Supp. 2d 328, 332 (S.D.N.Y. 2001). Gianni argued that the injunction should cover defendants' conduct outside the United States, while Alfredo and Foldom argued that the injunction should be limited to defendants' activities within the United States. Alfredo and Foldom therefore proposed adding the phrase "in the United States" in various paragraphs of the injunction.Id. The Preliminary Injunction signed by Judge Stein on February 10, 1998 did not incorporate defendants' proposed additions of the phrase "in the United States." Id. However, the Preliminary Injunction did refer to "the United States" in one paragraph, which appeared to have been adopted verbatim from the original proposal submitted by Gianni. Id. By letter dated March 25, 1998, counsel for Alfredo and Foldom requested a conference with Judge Stein to clarify the extraterritorial application of the Preliminary Injunction. Id. at 333. Judge Stein denied this request. Id.
In an Opinion and Order issued on January 4, 2001 (the "January 2001 Opinion and Order"), this Court clarified that the Preliminary Injunction applied extraterritorially. See id. at 341. The Court identified several factors that contributed to its finding. First, no paragraph other than paragraph 8 of the Preliminary Injunction contained any geographic limitation. Second, Judge Stein's rejection of Alfredo and Foldom's attempts to include the phrase "in the United States" in three other paragraphs, together with his having placed the burden on defense counsel to convince him that the injunction should be limited to the United States, amounted to an affirmative statement manifesting his intent that the injunction should apply extraterritorially. See id. at 335. Third, the Court found that the grammatical structure of paragraph 8 also suggested that the injunction was not limited to the United States. Id. Finally, the Court noted that there was evidence that Alfredo himself had construed the injunction to apply extraterritorially when he sent a copy of the injunction to at least fifteen companies outside of the United States in an apparent attempt to comply with paragraph 15's requirement that he provide a copy of the injunction to "all present and former licensees, franchisees, customers and distributors." Id.
In addition, in the January 2001 Opinion and Order, the Court found that the extraterriorial application of the Lanham Act was supported by the three-part test developed by the Second Circuit in Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633 (2d Cir.), cert. denied, 352 U.S. 871 (1956): (1) whether the defendant is a United States citizen; (2) whether a conflict exists between the defendant's trademark rights under foreign law and the plaintiff's rights under domestic law; and (3) whether the defendant's conduct has a substantial effect on United States commerce. See A.V. By Versace, 126 F. Supp. 2d at 336 (citing Vanity Fair, 234 F.2d at 642 (denying extraterritorial application of the Lanham Act when defendant was not a U.S. citizen and a conflict existed with foreign law)). The Court found that all three factors supported the exercise of extraterritorial application of the Lanham Act. Id. at 341.
IV. The Modified Preliminary Injunction
On September 3, 2002, the Court found Alfredo in contempt of Court because of his numerous violations of the Preliminary Injunction. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2002 WL 2012618, at *9 (S.D.N.Y. Sept. 3, 2002). Specifically, the Court found that Alfredo had been involved in the improper sale of watches, jeans, and handbags without the disclaimer required by the Preliminary Injunction; that Alfredo had marketed various products featuring the Infringing Marks on the Internet and failed to take the steps mandated by a previous Court order to stop such activities; and that Alfredo had been involved in a clothing enterprise with L'Abbligiamento using Infringing Marks and failing to use the required disclaimer. See id. at *7-9. In addition, the Court granted Gianni's motion to modify the preliminary injunction to prohibit Alfredo from using the Versace surname in any commercial context whatsoever. See id. at *13. In so doing, the Court noted that "the record reflects a deliberate pattern of deception by which Alfredo Versace has repeatedly used his surname in ways designed to create the impression that his goods are associated with those of Gianni Versace, in violation of judicial orders to the contrary." Id. at *12. The Court directed Gianni to submit a proposed modified preliminary injunction, and it ultimately signed the Modified Preliminary Injunction on January 28, 2003. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2003 WL 193078 (S.D.N.Y. Jan. 28, 2003).
V. The Permanent Injunction
As noted above, on January 24, 2005, the Court granted Gianni's request for the entry of a permanent injunction against Alfredo that would be similar in all material respects to the Modified Preliminary Injunction currently in force. See A.V. By Versace, Inc. v. Versace, Nos. 96 Civ. 9721, 98 Civ. 0123, 01 Civ. 9645, 2005 WL 147364, at *15 (S.D.N.Y. Jan. 24, 2005). The Court found that Gianni had proven actual success on the merits and irreparable harm sufficient to warrant the entry of a permanent injunction in the third of the triad of consolidated cases in this litigation. The Court also found that there was a "cognizable danger of recurrent violation" by Alfredo based on his repeated violations of the terms of the Preliminary Injunction, id. at *6 (quoting Hard Rock Cafe Int'l. (USA) Inc. v. Morton, No. 97 Civ. 9483, 1999 U.S. Dist. LEXIS 13760, at *15 (S.D.N.Y. Sept. 8, 1999)), and that the Court had "given Alfredo every opportunity to work within the reasonable restrictions of the preliminary injunction and remedy" before it reached this decision, id.
The Court noted that although it considered the totality of the consolidated cases in its analysis, it need only find that Gianni had demonstrated actual success on the merits and irreparable harm in one of the three cases to issue a permanent injunction. See id. at *5.
At the conclusion of its January 24, 2005 Opinion and Order, the Court ordered Gianni to submit a proposed permanent injunctive order to the Court on five days notice to defendants.See A.V. By Versace, Inc. v. Versace, Nos. 96 Civ. 9721, 98 Civ. 0123, 01 Civ. 9645, 2005 WL 147364, at *8 (S.D.N.Y. Jan. 24, 2005). Gianni filed the proposed permanent injunction on August 11, 2005, and, as noted above, the Court signed the Permanent Injunction today. The Permanent Injunction tracks substantially the terms of the Modified Preliminary Injunction that Alfredo seeks to modify.
DISCUSSION
I. Modification of a Preliminary Injunction
"An injunction is an ambulatory remedy that marches along according to the nature of the proceeding. It is executory and subject to adaption as events may shape the need, except where rights are fully accrued or facts are so nearly permanent as to be substantially impervious to change." Sierra Club v. United States Army Corps of Eng'rs, 732 F.2d 253, 256 (2d Cir. 1984) (citing United States v. Swift Co, 286 U.S. 106, 114 (1932)). The Second Circuit has stated that a district court's "decision whether to modify a preliminary injunction involves an exercise of the same discretion that a court employs in an initial decision to grant or deny a preliminary injunction." Weight Watchers Int'l, Inc. v. Luigino's, Inc., 423 F.3d 137, 141 (2d Cir. 2005) (citing Sierra Club, 732 F.2d at 256). A district court's denial of a motion to modify a preliminary injunction is reviewed for abuse of discretion. Id. (citing Sierra Club, 732 F.2d at 257). The court abuses its discretion where it applies an incorrect legal standard or bases its ruling on findings of fact that are clearly erroneous. Id.
II. The Present Motion
As the Court will explain below, because the Court has signed the Permanent Injunction, Alfredo's motion to amend the Modified Preliminary Injunction is moot. However, because it may shed light on why the Permanent Injunction does not incorporate the amendments to the Modified Preliminary Injunction sought here by Alfredo, the Court will address Alfredo's arguments.
Alfredo asserts that the Modified Preliminary Injunction is impermissibly broad and that Alfredo would suffer irreparable harm if the Court refused to narrow its scope. (Def.'s Mot. Mod. Prelim. Inj. 1, 4.) Specifically, Alfredo requests that the Modified Preliminary Injunction be amended to permit him to use his name in the sale of commercial products not presently sold by Gianni so long as they are exclusively marketed outside the United States. (Def.'s Mot. Mod. Prelim. Inj. 4.) Alfredo proposes that if the Modified Preliminary Injunction were thus amended, he would expressly prohibit distribution of such products over the Internet and expressly prohibit the resale or redistribution of such products into the United States. (Def.'s Mot. Mod. Prelim. Inj. 4.) This arrangement, asserts Alfredo, would ensure that no infringing products enter the United States and would serve as a prophylactic against any possible product confusion. (Def.'s Mot. Mod. Prelim. Inj. 4.)
A. The Extraterritorial Application of the Lanham Act
The majority of Alfredo's argument consists of claims that the Court erred in its January 2001 Opinion and Order. First, Alfredo argues that this Court misinterpreted the Preliminary Injunction entered by Judge Stein to apply extraterritorially in its January 2001 Opinion and Order. (Def.'s Mot. Mod. Prelim. Inj. 6.) Along these lines, Alfredo submits that the Court's finding in its January 2001 Opinion and Order that "Judge Stein's refusal to add a geographic limitation to paragraph 15 demonstrates inescapably that he originally interpreted the injunction to apply extraterritorially," A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 126 F.Supp.2d 328, 336 (S.D.N.Y. 2001), conflicts with the Court's statement in its March 6, 2000 Opinion and Order that "as a whole, and considering the circumstances surrounding its formation, the Court cannot interpret the injunction to `clearly and unambiguously' cover overseas activities," A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 87 F. Supp. 2d 281, 291 (S.D.N.Y. 2000). (Def.'s Mot. Mod. Prelim. Inj. 7.)
As Alfredo is well aware, the Court's March 6, 2000 Opinion and Order was issued in response to a motion by Gianni to hold Alfredo in contempt for violating the terms of the Preliminary Injunction. As such, the Court was mindful of the standard for a finding of civil contempt, to wit, the Second Circuit's admonition that "a contempt holding will fail unless the order violated by the contemnor is clear and unambiguous." A.V. By Versace, 87 F. Supp. 2d at 288 (quoting United States v. Local 1804-1, Int'l Longshoremen's Ass'n, 44 F.3d 1091, 1096 (2d Cir. 1995)). The January 2001 Opinion and Order, on the other hand, was issued in response to Gianni's motion to modify the Preliminary Injunction to apply worldwide. The January 2001 Opinion and Order thus focused specifically on the issue of whether Judge Stein's Preliminary Injunction applied extraterritorially, and received the benefit of full briefing on that issue by both parties.
In addition, Alfredo willfully has confused the issue with his selective quoting of the Court's decisions. He neglects to recognize that the while the Court, in its March 6, 2000 Opinion and Order, found that the Preliminary Injunction did not "clearly and unambiguously" cover overseas activities, id. at 291, it also noted that "the Court would probably side with Gianni were it forced to choose among the two competing interpretations" regarding extraterritorial application, id. at 292. Moreover, the full sentence Alfredo quotes from the January 2001 Opinion and Order reads: "Mr. Versace's willingness to send the requisite notice to these foreign companies, in light of Judge Stein's refusal to add a geographic limitation to paragraph 15, demonstrates inescapably that he originally interpreted the injunction to apply extraterritorially." A.V. By Versace, 126 F.Supp. 2d at 336. The Court thus was emphasizing that evidence existed that Alfredo himself had construed the Preliminary Injunction to apply extraterritorially, as indicated by the fact that he had sent a copy of the injunction to at least fifteen companies outside the United States in an apparent attempt to comply with paragraph 15.Id. This was just one of several factors weighing in favor of the Court's conclusion that the Preliminary Injunction applied to Alfredo's activities both in the United States and abroad. Id. at 335-36.
Alfredo also claims that the Court in its January 2001 Opinion and Order misapplied the three Vanity Fair factors: (1) whether the defendant is a United States citizen; (2) whether a conflict exists between the defendant's trademark rights under foreign law and the plaintiff's rights under domestic law; and (3) whether the defendant's conduct has a substantial effect on United States commerce. See id. at 336 (citation omitted). Regarding the first factor, the Court found that Alfredo could not rely on his Italian citizenship to shield him from application of the Lanham Act because there was evidence that Alfredo, who had resided in and conducted business in the United States for more than 40 years, was the controlling force behind Foldom, a New York corporation. See id. at 337 (citing Calvin Klein Indus., Inc. v. BFK Hong Kong, Ltd., 714 F.Supp. 78, 80 (S.D.N.Y. 1989)). Alfredo argues that the Court failed to place adequate emphasis on Alfredo's Italian citizenship, and asserts that the Court disregarded evidence that Alfredo had no corporate relationship with Foldom. (Def.'s Mot. Mod. Prelim. Inj. 8.) On the contrary, and as discussed exhaustively in the January 2001 Opinion and Order, the Court considered a wealth of evidence that Alfredo was the controlling force behind Foldom. See A.V. By Versace, 126 F. Supp. 2d at 337-38. Nothing presented by Alfredo in his motion has convinced the Court otherwise.
The evidence that Alfredo claims the Court disregarded in its January 2001 Opinion and Order consists of three letters to the Court dated January 23, January 24, and January 25, 2001, the last of which is dated one day after the Court delivered the January 2001 Opinion and Order. See Zack Aff., Ex. I, June 3, 2005.
Alfredo also argues that Foldom is no longer in business, and that therefore there exists no United States entity through which Alfredo could direct business. (Def.'s Mot. Mod. Prelim. Inj. 8.) To begin with, Alfredo has presented no evidence of Foldom's defunct status beyond his counsel's statement that "[a]t present, it is [his] understanding that Foldom is no longer in business."See Zack Aff. ¶ 13, June 3, 2005. Moreover, as the Court noted in its January 2001 Opinion and Order, "[i]n the absence of any Second Circuit precedent, it appears that `[n]one of these three criteria is dispositive of the analysis . . . and a court must employ a balancing test of all three factors to determine whether the statute is properly implicated.'" A.V. By Versace, 126 F.Supp. 2d at 337 (quoting Warnaco Inc. v. VF Corp., 844 F.Supp. 940, 950 (S.D.N.Y. 1994)). The Court reminds Alfredo, as it did in the January 2001 Opinion and Order, that the Second Circuit has stated that foreign citizenship alone may not be sufficient to thwart extraterritorial application of the Lanham Act, see Totalplan Corp. of Am. v. Colborne, 14 F.3d 824, 830 (2d Cir. 1994), and that several courts in the Southern District of New York have refused to allow the citizenship status of a resident alien to defeat extraterritorial application of the Lanham Act,see A.V. By Versace, 126 F.Supp. 2d at 337 (collecting cases).
Regarding the second Vanity Fair factor, the Court found in its January 2001 Opinion and Order that Alfredo had failed to produce any concrete evidence of valid trademark rights in foreign countries, and that Gianni had documented its superior rights in various foreign jurisdictions. See A.V. By Versace, 126 F. Supp. 2d at 339. Alfredo again fails to offer any such evidence of valid foreign trademark rights. Alfredo complains that the Court did not "limit the injunction to a specific set of countries where a perceived threat of infringement existed." (Def.'s Mot. Mod. Prelim. Inj. 8.) However, the Court noted in its January 2001 Opinion and Order that "[i]f Mr. Versace subsequently proves that he possesses valid trademark rights in a foreign country, the Court would likely find that the preliminary injunction does not apply in that country." See A.V. By Versace, 126 F. Supp. 2d at 339. Alfredo has made no such showing here.
With respect to the third prong of the Vanity Fair analysis, Alfredo argues that if the Modified Preliminary Injunction were amended as he requests, his conduct would have no effect on United States commerce. He assures the Court that if he were given the opportunity to sell cigarettes in Russia, he would expressly forbid resale or redistribution and would not permit any sales or distribution through the Internet. (Def.'s Mot. Mod. Prelim. Inj. 5.) Unfortunately, Alfredo's assurances that he will abide by the terms of a newly modified injunction fly in the face of the history of this litigation. Since the Preliminary Injunction was entered, the Court on five occasions has found Alfredo in contempt for violating the terms of the injunction and subsequent court orders. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2004 WL 691243, at *7 (S.D.N.Y. Mar. 31, 2004); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 279 F. Supp. 2d 341, 355-56 (S.D.N.Y. 2003); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2002 WL 2012618, at *8 (S.D.N.Y. Sept. 3, 2002); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 191 F. Supp. 2d 404, 404-05 (S.D.N.Y. 2001); A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 87 F. Supp. 2d 281, 294-96 (S.D.N.Y. 2000). Alfredo's past recalcitrance is precisely what led to the modification of the Preliminary Injunction — which modification Alfredo now seeks to undo through assurances that he will mend his future conduct — to bar Alfredo's use of the Versace surname in any commercial context. In particular, on September 3, 2002, this Court held Alfredo in contempt for his involvement in the sale of watches, jeans, and handbags without the use of the disclaimer mandated by the original Preliminary Injunction. See A.V. By Versace, 2002 WL 2012618, at *8. This Court also previously has found Alfredo in contempt for using offshore Internet sites to advertise and distribute his products in the United States in violation of the Preliminary Injunction. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., 87 F. Supp. 2d 281, 294-95 (S.D.N.Y. 2000). Yet Alfredo assures the Court that he will prohibit sales or distribution through the Internet in the future — even as he continues to maintain, as he has maintained in the past, see A.V. By Versace, 2002 WL 2012618, at *5, that he has no power to control what happens over the Internet. (See Def.'s Mot. Mod. Prelim. Inj. 4 ("Alfredo Versace, although having no control over the internet, would expressly prohibit distribution through the internet.")). The history of Alfredo's transgressions led the Court to determine in its January 24, 2005 Opinion and Order that a "cognizable danger of recurrent violation" existed,A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 01 Civ. 9645, 2005 WL 147364, at *6 (S.D.N.Y. Jan. 24, 2005), and this danger prevents the Court from relying on Alfredo's present assurances.
Alfredo argues that "no evidence was ever presented that he derived any revenue from the Internet sites that he was supposedly affiliated with," and that "[a]bsent evidence that Alfredo Versace personally benefited from the Internet or personally directed product sales via the Internet, the imposition of a worldwide injunction is improper." (Def.'s Mot. Mod. Prelim. Inj. 9.) Alfredo provides no legal authority for this assertion or its relevance to the Vanity Fair analysis. More important, although Alfredo renews his argument that "he never conducted business via the Internet," this Court previously has found that Alfredo has marketed products featuring the Infringing Marks on the Internet in violation of the Preliminary Injunction. See A.V. By Versace, 2002 WL 2012618, at *8.
B. Alfredo's Argument that He Has a Special Right to Use His Name
Finally, Alfredo argues that he has a special right to use his name in a non-infringing manner. (See Def.'s Mot. Mod. Prelim. Inj. 11-14.) The Court previously has addressed this issue at length. See A.V. By Versace, Inc. v. Gianni Versace, S.p.A., Nos. 96 Civ. 9721, 98 Civ. 0123, 2002 WL 2012618, at * 12-13 (S.D.N.Y. Sept. 3, 2002) (noting that courts are reluctant to preclude an individual from using his own surname when the use is "honest and straightforward," but finding that the record reflected "a deliberate pattern of deception" by which Alfredo had repeatedly used his surname in ways designed to create confusion with Gianni's trademarks (internal quotation marks omitted)). The Court sees no need to expand on the issue here.
III. Mootness
Neither party has raised the issue of mootness. However, because mootness is a matter of jurisdiction, the Court may raise the issue sua sponte. See Fox v. Bd. of Trs. of State Univ. of New York, 42 F.3d 135, 140 (2d Cir. 1994) ("[T]he condition of mootness is not a defense that could be waived by the Defendants, but rather is a condition that deprives the court of subject matter jurisdiction.").
It is clear that when a court enters a permanent injunction, the issue of the preliminary injunction becomes moot, because the latter merges into the former. See Grupo Mexicano de Desarrollo S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999) (citing Smith v. Illinois Bell Tel. Co., 270 U.S. 587 (1926) (dismissing appeal from an interlocutory injunction on the basis that the interlocutory injunction had merged into the final judgment)); Construction Technology, Inc. v. Cybermation, Inc., 965 F.Supp. 416, 443 (S.D.N.Y. 1997) (denying defendant's motion to modify preliminary injunction and stating that "[t]he preliminary injunction will now be moot with the entry of a permanent injunction"). The Court has signed the Permanent Injunction; the Modified Preliminary Injunction that Alfredo seeks to amend has merged into the Permanent Injunction. Therefore, Alfredo's motion to amend the Modified Preliminary Injunction is denied as moot.
CONCLUSION
For the foregoing reasons, Alfredo's motion to amend the Modified Preliminary Injunction hereby is DENIED AS MOOT. The Parties are ordered to appear before this Court at the United States Courthouse, 500 Pearl Street, Courtroom 18B, New York, New York, on Wednesday, January 25, 2005, at 10 a.m. for a pre-trial conference.
SO ORDERED.