Opinion
Civil Action 1:21-cv-01277-MKV
11-29-2022
CHANEL, INC., Plaintiff, v. SHIVER AND DUKE, LLC, EDITH ANNE HUNT and JOHN DOES 1-10, Defendants.
Barbara A. Solomon, Esq. Shelby P. Rokito, Esq. FROSS ZELNICK LEHRMAN & ZISSU, P.C. Attorneys for Plaintiff Chanel, Inc. Peter F. Schoenthaler, Esq. SCHOENTHALER LAW GROUP, David G. Liston, Esq. LISTON ABRAMSON LLP Attorneys for Defendants Shiver and Duke, LLC, Edith Anne Hunt
Barbara A. Solomon, Esq. Shelby P. Rokito, Esq. FROSS ZELNICK LEHRMAN & ZISSU, P.C. Attorneys for Plaintiff Chanel, Inc.
Peter F. Schoenthaler, Esq. SCHOENTHALER LAW GROUP, David G. Liston, Esq. LISTON ABRAMSON LLP Attorneys for Defendants Shiver and Duke, LLC, Edith Anne Hunt
AMENDED PROPOSED FINAL ORDER AND JUDGMENT ON CONSENT FOR PERMANENT INJUNCTION
The Honorable Mary Kay Vyskocil, United States District Judge
Plaintiff Chanel, Inc. (“Chanel”) having filed a complaint against Defendants Shiver and Duke, LLC (“Shiver and Duke”), Edith Anne Hunt (“Hunt”) and John Does 1-10 for trademark infringement under Section 32(1) of the United States Trademark Act of 1946, as amended (the “Lanham Act”), 15 U.S.C. § 1114(1); federal unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); trademark dilution under Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c); trademark infringement and unfair competition under New York common law; and trademark dilution under N.Y. Gen. Bus. Law § 360-l (the “Civil Action”), all arising out of Defendants' offering for sale of jewelry that incorporates used, repurposed buttons that bear Chanel's federally registered CC Monogram trademark (the “Buttons”) and promoted by use of the CHANEL trademark (the CC Monogram and CHANEL trademarks collectively the “Chanel Marks”); and
Defendants Shiver and Duke and Hunt (collectively the “Shiver and Duke Defendants”) having been duly served with a copy of the summons and complaint in the Civil Action, having retained counsel to represent it in the Civil Action, and having agreed to the jurisdiction and venue of this Court to adjudicate the Civil Action and to issue a Final Order and Judgment on Consent; and
Chanel and the Shiver and Duke Defendants having stipulated and consented to the entry of this Final Order and Judgment on Consent for Permanent Injunction (the “Judgment”) on the terms set forth herein;
NOW THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:
1. The Judgment issued herein is based on the following representations of the Shiver and Duke Defendants, which representations are made part of, are material to, and are a basis for entry into this Judgment:
(a) The Court has jurisdiction over the subject matter of this action, the Court has personal jurisdiction over the Shiver and Duke Defendants, venue is proper in this District, and the Shiver and Duke Defendants acknowledge that this Court has jurisdiction over each of them to enter this Judgment against them.
(b) Each of the Shiver and Duke Defendants consents to entry of this Judgment, each acknowledges that this Court can enter this Final Judgment that is binding on each of them individually, and each of the Shiver and Duke Defendants has the legal capacity to enter into this Judgment and to carry out all obligations and requirements herein.
(c) Hunt is the president and majority owner of Shiver and Duke and has the power and authority to sign on behalf of, enter into agreements on behalf of, and to otherwise bind Shiver and Duke on whose behalf she is executing this Judgment.
(d) Chanel has been using the Chanel Marks on or in connection with a wide range of fashion-related products, and the promotion thereof, including in connection with jewelry, and owns trademark registrations for the Chanel Marks, including in connection with jewelry, which registrations are valid and subsisting.
(e) The Shiver and Duke Defendants have manufactured, created, marketed, displayed, offered for sale, and sold jewelry that incorporates the Buttons. The Shiver and Duke Defendants contend without proof that the Buttons were authentic; however, none of which were obtained from Chanel or verified as genuine by Chanel and all of which were used without Chanel's authorization, permission, or consent (the “Objected-to Jewelry”).
(f) The materials used by the Shiver and Duke Defendants bearing the Chanel Marks that are or were incorporated into the Objected-to Jewelry consisted only of the Buttons. The Buttons were purchased from various used clothing stores, consignment clothing stores, and antique markets, including but not limited to, Scott Antique Market, in Atlanta, Georgia and Lakewood Antique Market in Atlanta, Georgia, and from online retailers with accounts at eBay, including Taxidoll, boutique shopstar, and veterocheck123. Attached hereto as Exhibit A are screenshots from eBay showing purchases of Buttons. The Shiver and Duke Defendants do not
have any other purchase documents, receipts, or statements of authenticity regarding the Buttons in their possession, custody, or control.
(g) The Shiver and Duke Defendants sold the Objected-to Jewelry solely and exclusively through their own website at shiverandduke.com and to a small number of retailers for purposes of resale. Attached as Exhibit B is a list of all of the retailers to whom the Shiver and Duke Defendants sold the Objected-to Jewelry and copies of all receipts in their possession, custody, or control showing those sales to retailers for which the Shiver and Duke Defendants have proof. On October 13, 2022, the Shiver and Duke Defendants sent an email communication with attached letter in the form attached as Exhibit C to inform retailers to whom Objected-to Jewelry was sold by the Shiver and Duke Defendants that the Objected-to Jewelry is no longer available for sale from the Shiver and Duke Defendants. The Shiver and Duke Defendants have never sold or offered for sale any of the Objected-to Jewelry to wholesalers.
(h) The Shiver and Duke Defendants, as of September 8, 2022, have (i) ceased the creation, manufacture, display, offering for sale, and sale of the Objected-to Jewelry through any and all channels of trade; (ii) ceased all advertising and marketing of the Objected-to Jewelry; (iii) used their best efforts to remove all references to the Chanel Marks and all references and depictions of any Objected-to Jewelry from all media, all websites and all social media sites that they control or over which they have the right to control; and (iv) used their best efforts to remove all references to the Chanel Marks in source code, metadata, AdWords, sponsored ads, user names, account names, page tags, and favicons from all media, website and all social media sites that they control or over which they have the right to control.
(i) Other than the Objected-to Jewelry, neither of the Shiver and Duke Defendants uses or has used any of the Chanel Marks for any commercial purpose; neither has
made any use of the Chanel Marks to advertise, market, or promote any goods or services; and neither has bid on any of the Chanel Marks for purposes of influencing Internet search results.
(j) Other than the business entity Shiver and Duke, none of the Shiver and Duke Defendants has any ownership interest in any business involved in the sale, offering for sale, marketing, advertising or display of any services or products, including but not limited to, jewelry, that bear any of the Chanel Marks, that are created out of or that incorporate any materials bearing any of the Chanel Marks, or that are otherwise advertised or promoted by reference to any of the Chanel Marks (the “Prohibited Products”).
(k) The Shiver and Duke Defendants are the sole manufacturers of the Objected-to Jewelry and did not purchase the Objected-to Jewelry from any other source.
(1) The best estimate by the Shiver and Duke Defendants is that they manufactured in total approximately 400 pieces of Objected-to Jewelry. The Shiver and Duke Defendants' current inventory of Objected-to Jewelry or other products that are not created or manufactured by Chanel and that bear a Chanel Mark is four (4) necklaces and the Shiver and Duke Defendants' complete inventory of buttons or other items bearing a Chanel Mark purchased or obtained for the purpose of creating or manufacturing Objected-to Jewelry or other products is twelve (12) Buttons.
(m) Other than the items identified in subparagraph (1) above, none of the Shiver and Duke Defendants, nor any of their affiliates, agents, employees, servants, licensees, or any entities owned or controlled in whole or in part by any one of them, have possession, custody, or control of any remaining inventory of materials (including finished goods) bearing any of the Chanel Marks.
(n) The Shiver and Duke Defendants do not have any business cards, stationary, advertising or marketing materials or other items that incorporate, bear or feature any
of the Chanel Marks or any other mark that calls to mind or is intended to be associated with Chanel or that refers to any products offered for sale by using any of the Chanel Marks.
(o) The Shiver and Duke Defendants represent that as of October 31, 2022 they have preserved all books, records (including all hard drives on computers used for business purposes, including servers, as well as all computer disks and backup disks) and other documents concerning all transactions relating to the purchase by the Shiver and Duke Defendants of any materials bearing any of the Chanel Marks that the Shiver and Duke Defendants used for their Objected-to Jewelry, the provenance and authenticity of any such materials, and the sale of the Objected-to Jewelry and have provided all such materials to Chanel as reflected in Exhibits A -C and further represent that (a) should they discover any additional documents relevant to the issues raised in the complaint in this action they shall provide such documents to Chanel within five (5) business days of discovery and (b) they shall not rely on any documents related to the purchase by the Shiver and Duke Defendants of any materials bearing any of the Chanel Marks that the Shiver and Duke Defendants used for their Objected-to Jewelry, the provenance and authenticity of any such materials that have not been provided to Chanel in any subsequent dispute or proceeding with Chanel, including any proceeding arising out of compliance with this Judgment.
(p) Entry into this Judgment does not violate any other agreements that the Shiver and Duke Defendants have entered into with any third party and the Shiver and Duke Defendants have the right and ability to carry out all terms of this Agreement.
2. Shiver and Duke; any affiliate, division, subsidiary, parent, predecessor, successor, assign, transferee, or related company of Shiver and Duke; any officer, agent, shareholder, managing member, representative, principal, owner, director, licensee, or employee of Shiver and Duke, including but not limited to Hunt; any company now or in the future owned in majority part by or under control or management of Shiver and Duke or owned or controlled by any principal or majority owner of Shiver and Duke or under common management with Shiver and Duke; any transferee, assignee, or heir of Hunt; any company in which Hunt now or in the future is a controlling officer, director, member, manager or of which Hunt either now or in the future is otherwise a majority stockholder; any company or entity now or in the future under the control, ownership or management of Hunt, who or which receives notice of this Judgment directly or otherwise (collectively the “Enjoined Parties”), are hereby permanently enjoined and forever restrained from:
(a) using for any purposes any of the Chanel Marks or any variant thereof in any form or in any media and whether or not it is incorporated into or used on any materials, whether or not such materials are genuine (collectively the “Prohibited Marks and Materials”), in or as part of a design, logo, or trademark; using any of the Prohibited Marks and Materials in or on any of the Prohibited Products; or otherwise using any of the Prohibited Marks and Materials in connection with the importation, production, creation, manufacture, distribution, promotion, advertisement, sale, offering for sale, of any Prohibited Products or to otherwise promote or advertise any business, product or service;
(b) importing, producing, creating, manufacturing, distributing, promoting, advertising, selling, offering for sale, advertising or promoting any products not made or authorized by Chanel that are made up in whole or in part of buttons or other materials or components bearing any of Chanel's trademarks including but not limited to the Chanel Marks, or that otherwise bear any of Chanel's trademark or consist of any of the Prohibited Marks and Materials, or otherwise supplying any Prohibited Marks and Materials to any third party or otherwise contributing to any third party's use of Prohibited Marks and Materials;
(c) making any reference to Chanel or using any of the Chanel Marks or the Prohibited Marks and Materials in any media for any purpose other than to refer to genuine Chanel products in their original form;
(d) re-purposing any buttons or other materials or components bearing any of the Chanel Marks so as to create a new or different product or otherwise conducting any business that manufactures, sells, advertises, or promotes any re-purposed products or any component parts or other materials that use or consist of any of the Prohibited Marks and Materials;
(e) using any false designation of origin or false description (including, without limitation, any letters or symbols), or performing any act which can, or is likely to, lead members of the trade or public to believe that any of the products of any of the Enjoined Parties is associated with Chanel or that any product imported, manufactured, created, distributed, advertised, promoted, offered for sale or sold by any of the Enjoined Parties that is not in fact a genuine Chanel product made wholly by Chanel is in any manner associated or connected with Chanel, or is authorized, licensed, sponsored, otherwise approved by, guaranteed by or is otherwise authenticated by Chanel;
(f) obtaining or seeking to obtain any trademark or copyright registrations in the United States for any design or mark that consists in whole or in part or includes any of the Chanel Marks;
(g) engaging in any activity constituting unfair competition with Chanel, constituting an infringement of the Chanel Marks, or diluting the Chanel Marks;
(h) transferring, consigning, selling, shipping or otherwise moving any goods, packaging or other materials in the Shiver and Duke Defendants' possession, custody or control bearing any of the Chanel Marks; and
(i) assisting, aiding, or abetting any other person or business entity in engaging in or performing any of the activities referred to in subparagraphs (a) through (h) above.
3. Within ten (10) business days of entry of this Judgment, the Shiver and Duke Defendants, at their own cost, shall deliver to Chanel or to any entity specified by Chanel (x) all of the remaining inventory of finished goods listed above in Section 1(1), and (y) all of their inventory of materials bearing any of the Chanel Marks not incorporated into finished pieces (or that has been removed from finished pieces) listed above in Section 1(1). For the avoidance of doubt, the Shiver and Duke Defendants do not need to deliver any component pieces such as chains or earring backings that do not bear or include or display a Chanel Mark or that do not consist of or incorporate any of the Prohibited Marks and Material. The Shiver and Duke Defendants shall not be compensated for the value of any of the materials delivered to Chanel as required by this Judgment. Chanel shall be permitted to destroy or otherwise dispose of such goods in any manner it sees fit without compensation to the Shiver and Duke Defendants or their owners or principals.
4. Should the Shiver and Duke Defendants or any one of them materially violate any provision of this Judgment, materially fail to comply with any of the obligations contained in this Judgment, or make any material error or omission in any of the representations contained in this Judgment, and if such violation is not curable or if after notice of the violation(s) by Chanel the Shiver and Duke Defendants fail to cure the same within five (5) business days of notice, Chanel shall be entitled to pursue claims for breach and seek remedies for contempt including all relief under 18 U.S.C. § 401, et. seq. In addition to the relief specified in Title 18, upon a Court's determination that the Shiver and Duke Defendants are in contempt of this Judgment, Chanel also shall be entitled to recover from the Shiver and Duke Defendants or any successor company the following:
(a) to the extent any of the representations set out in Section (1) are materially false, the Shiver and Duke Defendants shall be deemed to have violated the Court order and shall pay to Chanel $15,000 for each material misrepresentation that is false;
(b) to the extent any of the Enjoined Parties is found to be advertising, promoting, selling, offering for sale, making available for sale, accepting orders for, or filling orders for any Prohibited Products, the Shiver and Duke Defendants shall pay to Chanel liquidated damages in the amount of $50,000 for each different product together with the Shiver and Duke Defendants' gross profits from the sale of each such product;
(c) all investigation costs and other costs and fees incurred by Chanel in learning of or investigating any violation or breach of this Judgment;
(d) all of Chanel's costs and attorneys' fees incurred in connection with discovering any violation or breach of this Judgment, assessing the violation or breach of this Judgment, advising the breaching party or its counsel of any violation or breach of this Judgment and bringing any action for violation or breach of this Judgment.
Prior to seeking a finding of contempt based on a failure to comply with any of the curable obligations of this Final Judgment, Chanel shall first provide the Shiver and Duke Defendants with notice of the violation and provide the Shiver and Duke Defendants with five (5) business days to cure. Chanel shall not be obligated to provide notice of any errors or omissions in any of the representations before seeking contempt. Further, following its initial notice to cure, Chanel shall not be obligated to provide notice of any subsequent violations of the Final Judgment to the Shiver and Duke Defendants before seeking a finding of contempt.
The above remedies are cumulative. Should Chanel file a motion for breach of this Judgment or for contempt, none of the Shiver and Duke Defendants shall challenge the issuance or entry of this Judgment, its validity, or the Shiver and Duke Defendants' understanding of or knowledge of the terms of this Judgment. Further, should a Court find the Shiver and Duke Defendants or any one of them in contempt of this Final Order and Judgment none of the Shiver and Duke Defendants shall challenge Chanel's rights to any of the relief identified above.
5. This Judgment shall resolve those claims and demands that were asserted or could have been asserted in the Civil Action against the Shiver and Duke Defendants by Chanel arising out of the same facts set forth in the Civil Action and all relief and remedies requested by Chanel and shall constitute a final adjudication of the merits as to any such claims, remedies and relief as well as all defenses and counterclaims, permissive or compulsory, that were or could have been asserted by the Shiver and Duke Defendants in the Civil Action or that arise out of the same nexus of facts as the Civil Action and all relief and remedies requested and shall constitute a final adjudication of the merits as to any such claims, counterclaims, defenses, remedies, and relief.
6. The parties to this Judgment waive all right to appeal from entry of this Judgment.
7. By their signatures and acknowledgments below, the parties understand and agree to be bound by the terms of this Judgment.
8. The Shiver and Duke Defendants acknowledge that they have obtained advice of counsel with respect to this Judgment. The Shiver and Duke Defendants further acknowledge that their decision to enter into this Judgment has not been influenced by any promises, representations, or statements made by Chanel or anyone acting on its behalf other than those set forth in this Judgment.
9. In connection with any further proceedings concerning the subject matter of this Judgment, including the enforcement of this Judgment, service on Shiver and Duke or Hunt will be deemed effective by mailing a copy of any motion papers or other pleadings to Shiver and Duke, LLC, 1100 Peachtree Street, NE, Suite 690, Atlanta, Georgia 30309 with a copy via regular mail to Peter F. Schoenthaler at Schoenthaler Law Group, 3200 Windy Hill Road, SE, Suite 1600E, Atlanta, Georgia 30339 and by email to pfs@schoenthalerlaw.com and crosser@schoenthalerlaw.com.
10. This Judgment is a final judgment resolving all claims which Plaintiff asserted in the Civil Action against the Shiver and Duke Defendants. This order further dismisses without prejudice all claims against any unnamed John Doe Defendants and is made part of the public record. The parties will bear their own attorneys' fees and expenses in connection with the Civil Action.
SO ORDERED.
(EXHIBIT OMITTED)