SPRING 2012CANDIDACY PACKET

Thank you for your interest in the University of Denver Criminal Law Review. Please take some timeto review and familiarize yourself with these instructions before you begin. Good Luck!

Instructions:This candidacy packet requires three separate documents: (1) a current resume, (2) a cover letterexpressing your interest in the Criminal Law Review, and (3) the corrected Bluebook citationexercise. Please combine your resume and cover letter into one PDF document labeledlastname_resumecoverletter.

Following this instruction sheet is the Bluebook citation exercise. Your corrected citations should besent as a separate Word document labeled lastname_bluebook.

Please send an e-mail with these two documents as separate attachments (one PDF and one Worddocument) to crimlawreview@law.du.edu. Please include in this e-mail three days and time slotsyou can be available for an interview during the week of April 2 – 6. Interviews will last no longerthan 30 minutes.

These documents must be received by the Criminal Law Review no later than Saturday, March24th at 8:00 a.m.

Documents Required:(1) Resume and Cover Letter (one PDF document labeled lastname_resumecoverletter)(2) Bluebook Citation Exercise (Word format labeled lastname_bluebook)

Please also note that the Criminal Law Review annual retreat will be held on Sunday, April 22nd. Thisretreat is required for all new and returning Criminal Law Review members.

SPRING 2012 CANDIDACY PACKET

BLUEBOOK EDIT EXERCISE

The Bluebook Exercise follows at the end of these instructions. This exercise consists of editingcitation errors in the Argument Section of the attached Preliminary Injunction Motion. You do notneed to make any corrections to citations that are to affidavits, exhibits, or to other pages within thebrief; you only need to make corrections to citations to cases and statutes in the ArgumentSection. Other sections are included only to add context.

The Criminal Law Review has designed this exercise to introduce candidates to the citation styleused in American law reviews, and to test the candidate’s attention to detail and ability to editcitations using the Bluebook. To complete this exercise correctly, candidates should use the citationrules applicable to law reviews (not the blue pages) throughout the Bluebook. You must use the19th Edition of the Bluebook. We recommend using the Index and the Table of Contents to findthe appropriate rule, or rules, triggered by each citation and correction. We cannot overemphasizethe importance of accurate and thorough bluebooking, as bluebooking is the primary function ofCriminal Law Review Staff Editors.

Note: This is a time-consuming exercise. Do not wait until the last minute.

In order to complete the Bluebook Exercise, please complete the following steps:

1. Read the citation. Each citation could have one or more errors. Some citations may becorrect as stated.

2. Where a citation references content (e.g., states a case holding, or supports some otherproposition), you must verify the accuracy of each and correct them as needed. If you findthat a citation supports no particular proposition, you must correct the citation according tothe rules found in the Bluebook, and make a notation of the error.

3. List the Bluebook rule(s) for each correction. Please cite to the most specific rule. Example:Correct: Rule 6.2(a); Incorrect: Rule 6.

a. If you make a non-rule-based correction (e.g., incorrect page number or date),indicate this as well. Example: Rule 6.2(a), 13.4(b), corrected date.

4. You should interpret the Bluebook rules as strictly as possible. If you honestly think there isnot a clear and definite answer, you should include a note explaining your reasoning alongwith a corrected citation.

5. If a citation is missing information that cannot be determined (e.g., a page number), youshould indicate this using brackets (e.g., [page]). If the information can be determined, youshould locate it and provide it.

6. Note the following rules specific to the Criminal Law Review:a. The CLR follows the typeface conventions described in Rules 2.1(a)-(f), and in the

source-specific rules themselves. We do not make any of the changes described atthe beginning of Rule 2.1.

b. The CLR does not use parallel citations.

7. You will need to use Westlaw/LexisNexis and other Internet resources to check and correctmany of these citations. You may not consult or collaborate with anyone in completing thisexercise. Any attempt to do so will constitute a violation of the Honor Code and theCriminal Law Review will report all such violations to the Honor Board. The only exceptionto this rule is that you may ask a reference librarian for assistance in locating a source butONLY if you are unable to find a source on your own. You may NOT seek assistance withactual bluebooking.

8. Create a separate Word document. In this document, create a numbered list of eachcitation as if they were footnotes in a law review article. Title this document “BluebookExercise” and save the file as “lastname_bluebook” Please ensure your name appearssomewhere on this document.

9. The Bluebook exercise along with your cover letter and resume is due no later than8:00 a.m. on Saturday, March 24th. Please see the instructions contained on the first pageof this packet for how to submit these documents.

Here is an example of how your corrections should look:

Citation as it appears in the original:U.S. v. Harrison, 511 F.2d 122, 125-138 (10th Cir. 1996).

Corrected citation as it should appear in your separate document:United States v. Harrison, 511 F.2d 122, 125-38 (10th Cir. 1996).

Rule 10.2.1(f), Rule 10.2.2, Rule 3.2(a)

Good luck!

Plaintiff Leon Levin Sons, Inc. ("LLS") respectfully submits this memorandum of law in

support of its motion for a temporary restraining order and preliminary injunction to stop the

unauthorized use of its marks by defendant Chic, LLC ("Chic").

PRELIMINARY STATEMENT

LLS is threatened with immediate and irreparable harm by the unauthorized use of its

marks by Chic.

LLS granted Chic a license to use its marks, "LEON LEVIN," "PLAY BY LEON

LEVIN,""PLAY," and "LL SPORT" (collectively, the "Marks"). The license agreement

("License Agreement") required that Chic make royalty payments to LLS. Chic failed to make

such payments despite notice from LLS and an opportunity to cure such default. Chic further

breached the License Agreement by, among other things, omitting the symbol ® on labels for

apparel bearing the Marks, advertising apparel not bearing the Marks, and joining the Marks with

another name absent consent from LLS. LLS terminated the License Agreement and demanded

that Chic cease any unauthorized use of the Marks. Chic refused. Chic continues to make

unauthorized sales of apparel bearing LLS's distinctive Marks despite the termination of the

License Agreement.

Chic's unauthorized use of the Marks threatens LLS with immediate and irreparable

harm. Consumers will be misled or confused concerning whether LLS, the trademark owner,

approved the use of its Marks on goods that are being sold by Chic. Chic's continued

unauthorized use of the Marks threatens LLS with a loss of control over its valid Marks. This

loss of control will cause LLS to lose the ability to preserve the quality and continued vitality of

the Marks.

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Chic's wrongful acts constitute breach of the Licensing Agreement, trademark

infringement, and unfair competition. LLS is likely to succeed on the merits of these causes of

action against Chic. Therefore, the Court should issue a preliminary injunction to eliminate the

immediate and irreparable threat of harm to LLS caused by Chic's unauthorized use of LLS's

distinctive Marks.

STATEMENT OF FACTS

Since 1925, LLS Has Designed And Sold Quality Women’s Sportswear

For more than 75 years, LLS has been a family business that designs and sells high-end

women’s sportswear. LLS, founded by Leon Levin, began designing and selling high quality

women’s sportswear in 1925. (Affidavit of Neil Weiss dated April21, 2003 ("Weiss Aff.") a t

3.) In 1931, LLS began using the mark, "Leon Levin," on its products. (Id.) In approximately

1947, Mr. Levin's four sons, Stanley, Bill, Jess and Bernard, took over and continued the family

business. (Id.)

In the early 1960's, LLS partnered with Knitastiks International ("Knitastiks"), a knit

supplier and clothing designer, to design and sell a line of women’s golf apparel. (Id. at 4.)

This partnership between LLS and Knitastiks proved enormously successful as LLS's revenues

tripled in value. (Id.) Neil Weiss was, and still remains, the Chairman and CEO of Knitastiks.

(Id.)

The successful relationship between LLS and Knitastiks continued to benefit both

companies and, in 1982, Stanley, Bill, Jess, and Bernard Levin decided that they wanted to sell

LLS to Knitastiks. (Id.) They entrusted their family business to Neil Weiss and Knitastiks

because, for the past 20 years, they had worked hand in hand with Mr. Weiss and knew that he

cared about the Levin family tradition for high quality. (Id. at 5.) The Levins had all also

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become close friends with Neil Weiss and trusted him to maintain the reputation that they and

their father had built for LLS since 1925. (Id.)

Knitastiks accepted the offer and purchased 51%of LLS. (Id.) Although Bernard Levin

passed away, his three brothers continued to immerse themselves in the day-to-day business of

LLS even after Knitastiks assumed majority control. (Id.) Then, in 1987, Knitastiks purchased

the remaining 49% interest in LLS. (Id.) In keeping LLS as a family owned and operated

business, Neil's wife, Virginia Weiss, took over as Stylist and Merchandiser for LLS. (Id. at

6.) In the early 1990's, the Weiss's children, Doug Dimonda and Steve Weiss, began working

for LLS in various roles. (Id.)

Under the direction of Neil and Virginia Weiss, LLS continued to market high-end

women's sportswear successfully. (Id.) In the 1990's, LLS achieved record annual sales of

approximately $21 million. (Id.)

LLS’s Distinctive Marks

LLS's success has been achieved primarily under the clothing label Leon Levin ®.

LLS has used that mark upon high quality women's sportswear since 1931. To promote the

Leon Levin ® mark, LLS often incurred annual promotion and advertising expenses upwards

of $400,000, including attendance at trade shows and print ads in the New Yorker magazine.

(Weiss Aff. at 7.) As a result of LLS's investment in promoting and advertising the Leon

Levin ® mark, in addition to LLS's devotion to making only high quality clothes,

consumers associate Leon Levin® with high quality women's sportswear. (Id.)

In December 1988, LLS filed an application with the U.S. Patent and Trademark Office

to register "Leon Levin." (Id. at 8.) That application was granted and Leon Levin® has been

registered as a valid trademark with the U.S. Patent and Trademark Office since September 19,

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1989. (Id. at 8, Ex. A.) LLS has also registered Leon Levin® as a trademark in Canada and

Ireland. (Id.)

In addition to Leon Levin®, LLS has used and promoted the marks, "LL Sport," "Play,"

and "Play by Leon Levin." (Id.)

LLS Licensed Its Distinctive Marks To Chic

In 1999, LLS decided to sell certain of its assets, such as its current inventory, customer

lists, and sales orders, to Chic. (See Asset Purchase Agreement dated January 5, 2000 and

attached as Ex. B to the Weiss Aff.) 1 In connection with that transaction, LLS licensed to Chic

its distinctive Marks, "LEON LEVIN," "PLAY BY LEON LEVIN," "PLAY," and "LL

SPORT." (Weiss Aff. at 9, Ex. C.)

The License Agreement protected the reputation of the Marks by ensuring that the goods

manufactured by Chic must be of high quality:

6. Manufacture of Articles; Quality Control

6.1 The contents and workmanship of women's sportswearArticles (sometimes "Sportswear Articles") shall be at all times ofhigh quality consistent with the quality now associated withwomen's sportswear Products (sometimes "Sportswear Products")sold under the Licensed Mark (as exemplified by the AcquiredArticles). The contents and workmanship of all other Articles shallbe at all times of high quality commensurate with the quality of theSportswear Articles.

(Weiss Aff., Ex. C at §§ 6 - 6.1.) In addition, LLS retained the right to inspect and approve of

samples and advertising to ensure that Chic would not damage the reputation of LLS's Marks.

(Id. at §§ 6.1(b), 6.4, 6.5.)

In connection with the Asset Purchase Agreement, Chic executed a promissory note (the "PromissoryNote") by which Chic is bound to pay to LLS the principal sum of $675,975, plus all interest accrued, in thirty-six equal and consecutive monthly installments. Chic has failed to make its required payments under thePromissory Note. In order to hold Chic responsible for its failure to make such payments, LLS instituted a statecourt action, Leon Levin Sons, Inc. v. Chic, Charles L. Godfrey and Patricia Godfrey, Index No. 600437/02. Inthat state court action, LLS's request for relief is limited solely to an action for recovery upon the Promissory Noteand upon a guarantee of the Promissory Note.

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The License Agreement provided that Chic must pay royalties to LLS based upon a

percentage of net sales. (Id. at§ 7.) For 2000 and 2001, the License Agreement required that

such royalties be paid within 30 days after the end of each year; for 2002 and thereafter, royalty

payments were required to be paid on a quarterly basis. (Id. at § 7.3). In relevant part, the

License Agreement states:

7. Royalty

7.1 During each of t h e f i r s t a n d s e c o n d AnnualPeriods, Licensee shall pay to Licensor a royalty (the "Royalty")equal to 1 % of "Net Sales." During each Annual Period thereafterduring the initial term of this Agreement and any extensionof this Agreement under 2.1(b), Licensee shall pay to Licensor aroyalty (also, the "Royalty") equal to 6% of Net Sales (except asprovided in 5.1(a)(ii)).

7.2(a) For purposes hereof, "Net Sales" shall be deemed to meanthe invoiced amount of Articles (including Acquisition Articles) andLicensee Products shipped or sold by Licensee or any of itsaffiliates during the term of this Agreement, less only: (i) actual,customary and usual trade discounts actually earned and taken bycustomers; (ii) returns (provided that "Net Sales" shall include anyArticles and Licensee Products shipped to a customer in exchangefor returned Articles or Licensee Products); (iii) uncollectibleaccounts; and (iv) to the extent separately stated on Licensee'sinvoices to its customers, customs, shipping and freight charges andsales, use and excise taxes.

* * *7.3 During each of the first and second Annual Periods, theRoyalty shall be accounted for and paid annually within 30 daysafter the end of each such Annual Period. During each AnnualPeriod thereafter, the Royalty shall be accounted for and paidquarterly within 30 days after the end of each calendar quarterduring each such Annual Period.

(Id. at§§ 7, 7.1, 7.2(a), 7.3.)

Chic Experienced Financial Difficulties And Unsuccessfully Sought To Modify The LicenseAgreement

Chic began to experience financial difficulties shortly after the execution of the License

Agreement. In 2000, Chic reported a net loss of $41,876. (Weiss Aff. at Ex. D.) In 2001,

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Chic's financial difficulties significantly worsened-as evidenced by Chic’s net loss of

approximately $1.1 million in 2001. (Id.) During 2001, Chic went to LLS and requested that the

parties meet to discuss modifying Chic's obligations to LLS in light of Chic's worsening financial

situation. (Weiss Aff. at 12.)

In the fall of2001, LLS and Chic held several meetings in person and had further contact

by email and telephone regarding possible modifications to the License Agreement and to the

Asset Purchase Agreement. (Id.) The parties were ultimately unable to agree upon any

modification of those agreements, which therefore remained in effect. (Id.)

Chic Breached The Licensing Agreement By Not Making Royalty Payments

As Chic's financial difficulties worsened, it failed to pay to LSS the royalties required by

section 7 of the License Agreement. In 2000, the very first year of the License Agreement, Chic

reported net sales of $8,045,066. (Weiss Aff., Ex. D.) At a royalty rate of 1.5%, Chic should

have paid $120,676 to LLS by January 30, 2001. (Id. at 13 and Ex. C, § 7.) Chic did not. (Id.

at 13.)

In 2001, net sales were $5,892,854. (Id. atD.) At a royalty rate of 1.5%, Chic should

have paid $88,393 to LLS by January 30, 2002. (Id. at 13 and Ex. C, § 7.) Chic did not. (Id. at

13.)

In 2002, net sales through November were $6,289,059. (Id. at Ex. E.) Thus, net sales for

2002 were approximately $6,804,550. At a royalty rate of 6.0% for 2002, Chic should have

made royalty payments of at least $377,344 for 2002. (Id. at 13 and Ex. C, § 7.) Chic did not.

(Id. at 13.)

The amount of royalty payments due from Chic to LLS for the years 2000 to 2002 is at

least $586,413 plus interest. Thus far, Chic has paid only $300,000 to LLS. (Id.at 13.) These

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payments were made in monthly installments of$20,000 from January 2002 to March 2003.

LLS has accepted these payments under protest because, among other reasons, Chic has refused

to identify whether such payments constitute royalty payments or are payments for other

monetary obligations owed by Chic to LLS? (Id. at 14.) Whether or not the entire, a portion,

or none of the $300,000 was to satisfy royalty payments owed by Chic to LLS; Chic continues to

owe at least several hundred thousand dollars in royalty payments to LLS.

Chic Breached The License Agreement In Connection With The Manufacture, Advertising, AndLabeling Of The "Beach House" Line Of Apparel

In the spring of 2003, LLS discovered that Chic had, in addition to its failure to make

royalty payments, committed other material breaches of the License Agreement arising from

Chic’s conduct with respect to the manufacture, advertisement, and sale of "Beach House"

apparel. For example, Section 5 of the License Agreement forbids Chic from engaging in any

business other than the manufacture, production, marketing, advertising, distribution, and/or sale

of products bearing LLS’sMarks. (Weiss Aff. at 15 and Ex. C, § 5.) Despite this prohibition,

Chic has advertised apparel under the name "Beach House" without any reference to LLS's

Marks. (Id. at 15 and Ex. G.)

Paragraph 10.1 of the License Agreement forbids Chic to join any name with the Marks

so as to form a new mark or to use any name in connection with the Marks in any advertising,

labeling, or printed matter of any kind without LLS’s express consent. (Id. at 16 and Ex. C, §

10.1.) Nevertheless, Chic, without asking or receiving consent form LLS, has used ''Leon

Levin" on labels that also bear the name Beach House. (Id. at16 and Ex. H.)

In addition to royalty payments, Chic is obligated to pay the principal sum of $675,000, plus all interestaccrued, to LLS pursuant to the Promissory Note executed in connection with the Asset Purchase agreement. (Seesupra at p. 4, n.l; Weiss Aff. a t 14.) Therefore, Chic's payments thus far to LLS could constitute either paymentspursuant to the Promissory Note or royalty payments. However, Chic has refused to identify whether the amountspaid thus far to LLS are intended to satisfy its outstanding debt for royalties owed or its outstanding debt under thePromissory Note. In either event, the sum of Chic's payments to date, $320,000, is insufficient to satisfy either theamount owed by Chic in royalties or under the Promissory Note.

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Paragraph 10.4 of the License Agreement requires that Chic "shall cause to appear on all

Articles and on all materials on or in connection with which the Licensed Mark is used, such

legends, markings and notices as may be reasonably necessary in order to give appropriate notice

of any trademark, trade name or other rights therein or pertaining thereto." (Id.at 17 and Ex.

C, § 10.4.) In violation of this provision, Chic has failed to use the ® symbol next to the "Leon

Levin" mark on labels that also bear the name Beach House. (Id.at 17 and Ex. H.)

LLS Terminated The Licensing Agreement

Because of Chic's failure to pay royalties and other material breaches of the License

Agreement as described above, LLS terminated the License Agreement by written notice dated

April 15, 2003. (Weiss Aff. at 19, Ex. K.) The License Agreement gave LLS the right to

terminate the agreement based upon Chic's failure to make royalty payments. In relevant part,

the License Agreement states:

13. Defaults

13.1 (a) If Licensee fails to make any payment duehereunder, (i) Licensee shall pay interest on the unpaid balancethereof from and including the date such payment becomes dueuntil the date the entire amount is paid in full at a rate equal to theprime rate being charged in New York, New York by ChaseManhattan Bank as of the close of business on the date thepayment first becomes due plus once percentage point (or themaximum rate of interest which legally can be paid by Licensee, iflower), and (ii) if such default continues uncured for a period of15 days after notice thereof is given to Licensee, Licensor mayterminate this Agreement forthwith by notice to Licensee. . . . Inaddition, Licensee shall be responsible for and shall reimburseLicensor for any and all costs reasonably incurred by Licensor inseeking to collect any sums due to Licensor hereunder, includingattorneys' and collection agency fees and expenses.

(Id. at Ex. C, § 13 -13.l(a) (emphasis added).)

By a letter dated March 26, 2003, LLS gave notice to Chic that Chic was in default under

the License Agreement for failing to make royalty payments:

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Dear Mr. Godfrey:I write to provide you with notice that CHIC, LLC ("Chic")

is in default on its obligations under the licensing agreement (the"License Agreement") entered into as of January 5, 2002 betweenChic and Leon Levin Sons, Inc. ("LLS"). Chic has failed to makeroyalty payments to LLS as required pursuant to Section 7 of theLicense Agreement. Assuming that the $320,000 paid thus far byChic to LLS was for royalty payments, the amount of royaltypayments outstanding is $360,090 plus interest pursuant toparagraph 13.1(a) of the License Agreement.

We demand that Chic make immediate payment of$360,090 plus interest. Pursuant to paragraph 13.l(a) of the LicenseAgreement, LLS may terminate the License Agreement if Chicdoes not cure its default by paying $360,090 plus interest to LLSwithin 15 days.

(Id. at Ex. I.) Chic indisputably received such notice, as is evidence by its April 3, 2003 letter in

response to the notice of default. (Id.at Ex. J.) However, Chic did not cure its default. Chic

has made no additional royalty payments to LLS.

The License Agreement also gave LLS the right to terminate based upon Chic's wrongful

conduct with respect to the "Beach House" line of apparel:

If Licensee or Licensor fails to perform any of the material terms,conditions, agreements or covenants in this Agreement on itsrespective part to be performed and (A) such default is not curable. . . the other party, at is sole election, may terminate thisAgreement forthwith by notice to the defaulting party.

(Id. at Ex. C, § 13.1(b)(ii).)

Faced with the unfortunate circumstance of unpaid royalties and other material breaches

of the License Agreement by Chic, LLS terminated the License Agreement:

Chic's time to cure the default elapsed at the close of business onFriday, April 11, 2003. Accordingly, pursuant to paragraph13.1(a) of the License Agreement, we hereby terminate theLicense Agreement, effective immediately.

In addition to Chic's failure to cure its default for failure tomake royalty payments, we are hereby terminating the LicenseAgreement as a result of your actions with respect to themanufacture, advertisement, and sale of Beach House apparel.

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(Id. at Ex. K.)

Chic Is Making Unauthorized Sales Using LLS's Distinctive Marks

Chic's rights to use the Marks terminated along with the termination of the License

Agreement:

14.3 On the termination of this Agreement, all of the rightsof Licensee under this Agreement shall terminate forthwithand . . . shall revert immediately to Licensor . . . Licenseeimmediately shall cease the manufacture, production,marketing, advertising, distribution and sale of Articles andshall discontinue forthwith all use of the Licensed Mark and nolonger may use the Licensed Mark or any variation orsimulation thereof. . . .

(Weiss Aff. at Ex. C, § 14.3 (emphasis added).)

Despite the termination of the License Agreement and Chic's contractual agreement to

cease any use of LLS's distinctive Marks, Chic has continued to use the Marks in connection

with the manufacture, production, marketing, advertisement, distribution, and sale of women's

sportswear. (Id. at 23.) As of April 21, 2003, Chic was continuing to distribute for sale

clothing bearing LLS's Marks. (Id.)

In addition to the evidence that Chic is actually using the Marks despite the termination

of the License Agreement, Chic has demonstrated that it has no intent to cease and desist from

further use LLS's Marks. For example, in response to LLS's notice that Chic was in default of

the License Agreement, Chic responded not by stating that it would work toward curing such

default, but by arguing that Chic "is not in default." (Id. at Ex. J.) Also, LLS's notice of

termination requested that Chic respond in writing by April 16, 2003 that it would cease and

desist from any further use of LLS's marks. (Id. a t 22 and Ex. K.) Chic has not done so. (Id.

at 22.)

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Chic's unauthorized use of LLS's distinctive Marks threatens LLS with irreparable harm

absent injunctive relief. Indeed, the License Agreement recognizes that injunctive relief may be

sought for any unlawful or unauthorized use by Chic LLS's Marks. (Id. at Ex. C., § 14.1(a).)

The License Agreement provides that LLS is not obligated to secure a bond nor prove any actual

damages when seeking such injunctive relief. (Id.)

In addition, under the License Agreement, LLS had the benefit of contractual provisions

ensuring that Chic would use the Marks in such manner as to maintain their reputation ofhigh

quality women's sportswear. Now, LLS has no control over Chic's unauthorized use of its Marks,

thereby losing the ability to preserve the quality and continued vitality of the Marks.

In addition, consumers will be misled or confused concerning whether LLS, the

trademark owner, approved the use of its Marks on goods that are being manufactured and sold

by Chic despite the termination of the License Agreement.

ARGUMENT

TI1e standards for granting a temporary restraining order and a preliminary injunction

"are the same." Gund, Inc. v. Slv Enterprises, Inc.,2001 WL 125366, *l (S.D.N.Y.Feb.14,

2001). Such pendente lite relief "should be granted where the moving party demonstrates (1)

irreparable harm and (2) either (a) a probability of success on the merits or (b) sufficiently serious

questions going to the merits to make them fair grounds for litigation and a balance of hardships

tipping decidedly in the moving party's favor." [FIND THE CASE WHERE THIS QUOTE

CAME FROM]. Where, as here, a licensor seeks a preliminary injunction to prevent a former

licensee from unauthorized use of the licensor's trademark, New York courts generally issue

such an injunction:

For many years we held that a preliminary injunction shouldusually issue when the use of a mark creates a likelihood of

confusion in the consumers' minds as to the ownership orsponsorship of a product . . . in a licensor/licensee case thereasons for issuing a preliminary injunction for trademarkinfringement are more compelling than in the ordinary case. Whenin the licensing context unlawful use and consumer confusion havebeen demonstrated, a finding of irreparable harm is automatic.

Id. at 51

Furthermore, here there is a peculiar need for a temporary restraining order because Chic,

once it is on notice of LLS's request for injunctive relief, could destroy its inventory which

evidences Chic's infringement of LLS's Marks or sell its substantial inventory at bargain prices.

Such conduct would frustrate the intent of the Lanham Act to prevent trademark infringement

and would defeat LLS's ability to enforce its rights under the License Agreement, which include

the right to Chic's inventory following a termination of the License Agreement. An ex parte

temporary restraining order is appropriate under such circumstances:

The ex parte temporary restraining order is indispensable to thecommencement of an action when it is the sole method ofpreserving a state of affairs in which the court can provideeffective final relief. Immediate action is vital when destruction ofthe disputed property, its removal beyond the confines of the state,or its sale to an innocent third party is threatened. In thesesituations, giving the defendant notice of the application for aninjunction could result in an inability to provide any relief at all.

In the Matter of Vuitton Et Fils SA., 606 F.2d 1 (2d Cir.); see also Tommy Hilfiger Licensing,

Inc. v. Tee's Ave., Inc., 924 F.Supp. 17,20 (N.Y. 1996) (DRAFT PARENTHETICAL THAT

CAPTURES THE HOLDING TO SHOW FURTHER SUPPORT FOR SENTENCE ABOVE).

I. The Court Should Issue A Temporary Restraining Order AndPreliminary Injunction Because LLS Is Likely To Succeed On TheMerits Of Its Causes Of Action Against Chic

LLS's complaint alleges three causes of action against Chic: trademark infringement,

unfair competition, and breach of the License Agreement. LLS is likely to succeed on the merits

of each of these three causes of action against Chic.

(1) LLS Is Likely To Succeed On The MeritsOf Its Cause Of Action For Trademark Infringement

In order to prevail on its claim of trademark infringement under the Lanham Act, 15

U.S.C. 1114, LLS must prove only "that it has a valid mark entitled to protection and that the

defendant's use of it is likely to cause confusion." Morningside Group Ltd. vs. Mornngside Cap.

Group, L.L.C., 182 F.3d 133, at 137 (3d Cir. 1999); see Murjani Int’l, Ltd. v. Sun App., Inc.,

1987 Westlaw 15110 (S.D.N.Y. 1987) (to prevail on claim of trademark infringement under

section 32(a) of the Lanham Act, "plaintiff bears the burden of proving that (1) it owns valid

trademarks and (2) defendants' use of the marks creates a 'likelihood of confusion' as to the

source of their goods").

LLS has registered Leon Levin® as a trademark. (Weiss Aff. a t 8 and Ex. A) Such

registration is "prima facie evidence of the trademark's validity, of the registrant's ownership of

the mark, and of [LLS's] exclusive right to use the mark in commerce 'on or in connection with

the goods or services specified in the registration."' Chere, Inc. vs. Windstar Apparel, Corp.,

191 F. Supp. 2d 343 (S.D.N.Y.).

In addition, Chic agreed, by the terms of the License Agreement, that LLS is the rightful

owner of all the Marks and that Chic would never challenge LLS's ownership of or the validity

of the Marks:

10.2 Licensee acknowledges that, as between Licensor andLicensee, Licensor is the owner of all right, title and interest in andto the Licensed Mark throughout the Territory in any form orembodiment thereof and is also the owner of the goodwill attachedor which shall become attached to the Licensed Mark inconnection with the business and goods in relation to which thesame has been, is or shall be used.

* * *10.5 Licensee never shall challenge Licensor's ownership ofor the validity of the Licensed Mark or any application forregistration thereof, or any trademark registration thereof, orany rights of Licensor therein.

(Weiss Aff. at Ex. C, §§ 10.2, 10.5 (emphasis added).) Chic, by contract, is thus estopped

from challenging either LLS's ownership or the validity of the Marks.

Not only is LLS the undisputed owner of the Marks, but Chic has continued to use the

Marks despite that LLS terminated the License Agreement. (Supra at p. 11; Weiss Aff. at ¶¶ 22

-23.) Chic's continuing unauthorized use of the Marks creates a likelihood of confusion as to the

source of apparel bearing the Marks:

In the licensing framework, where the alleged unauthorized user ofthe trademark continues to use the identical, previously licensedtrademark, after revocation of the license, likelihood of confusionis established.

Ryan v. Volpone Stamp Co., 117 F.Supp.2d 369, 369 (S.D.N.Y.). As the Third Circuit

explained, likelihood of confusion is inherent where a former licensee continues to use a

licensor's valid trademarks:

A licensee or franchisee who once possessed authorization to usethe trademarks of its licensor or franchisor becomes associated inthe public's mind with the trademark holder. When such party, asdefendants here, loses its authorization yet continues to use themark, the potential for consumer confusion is greater than in thecase of a random infringer. Consumers have already associatedsome significant source identification with the licensor. In thisway a former licensee confuses and defrauds the public.

Church of Scientology International v. Elmira, 794 F.2d 38 (2d Cir. 1986); see also Murjani

Int 'l, Ltd., 1977 WL 15110, at*12 (former licensee's distribution of products bearing trademark

of licensor after license agreement terminated "would engender the false impression that the

[trademark owner] is the manufacturer of these products").3

LLS is therefore likely to succeed on the merits of its claim for trademark

infringement because it can demonstrate that it is the undisputed owner of the Marks, which are

entitled to protection, and that Chic's ongoing and unauthorized use of the Marks is likely to

cause confusion among consumers.

(2) LLS Is Likely To Succeed On The MeritsOf Its Cause of Action For Unfair Competition

LLS is likely to succeed on its cause of action alleging unfair competition, i.e., that

Chic has violated Section 43(a) of the Lanham Act, 15 § 1125(a), because Chic's unauthorized use

of LLS's Marks will confuse consumers as to the sponsorship or origin of the apparel

manufactured and distributed by Chic. Section 43(a) of the Lanham Act "proscribes false

representations, including misrepresentations as to the source or sponsorship of goods or

services." Murjni Int'l, Ltd., 1987 WL 151110, at *10; see also Bowmar Ins. Corp. v.

ContinentalMicrosystems, Inc.,497 F. Supp. 497, 956-957 (S.D.N.Y. 1980) (Section 43(a) is a

"remedial provision a n d should be broadly construed"). The requirements for a claim of unfair

competition under Section 43 of the Lanham Act are the same as those for a claim of trademark

infringement under Section 32 of the Lanham Act: "the use of one's trademark by another in a

way that is likely to confuse consumers as to the source of the product." Lois Sportswear, U.S.A.,

Inc. v. Levi Strauss, 799 F.2d 867 (2d Cir. 1986); see also Murjani Int'l, Ltd., 1987 WL 151110

(the "test for an unfair competition claim is whether consumers will be confused as to the

Although the likelihood of confusion analysis is generally guided by the eight factors set forth in PolaroidCorp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (1961), it is not necessary to analyze those factors where, ashere, an ex-licensee is using a previously licensed mark. See Ryan, 107 F. Supp. 2d at 400 ("application [of thePolaroid factors] may be unnecessary in the caseex-licensee using a previously licensed mark.”).

sponsorship or origin of the products"). "In order to be confused, a consumer need not believe

that the owner of the mark actually produced the item and placed it on the market. The public's

belief that the mark's owner sponsored or otherwise approved the use of the trademark satisfies

the confusion requirement." Id.

Here, like in Murjani, the defendant, Chic, is a former licensee that is using the

licensor's, LLS's, trademarks without consent and after the termination of the License

Agreement. In addition, LLS has demonstrated that Chic's unauthorized use of the Marks

creates a likelihood of confusion among consumers. (Supra at p. 15.) Therefore, LLS is likely

to succeed on the merits of its claim of unfair competition.

(3) LLS Is Likely To Succeed On The MeritsOf Its Cause Of Action For Breach Of The License Agreement

LLS is likely to succeed on the merits of its claim that Chic has breached the License

Agreement because Chic's continued use of the Marks despite LLS's termination of the License

Agreement constitutes a breach of contract. Precesion Tune, Inc. v. Pelter, 1989 WL 50796

(W.D.N.Y. 1989) ("[t]he continued use of the trade and service marks after termination has been

found to constitute a trademark infringement as well as breach of contract"). Also, Chic's

advertisement, manufacture, and sale of its line of "Beach House" apparel are material breaches

of the License Agreement

LLS had the right to terminate Chic based upon Chic's failure to pay royalties and Chic's

other material breaches of the License Agreement in connection with the manufacture,

advertising, and sale of "Beach House" apparel. "A trademark licensor is entitled to terminate a

license agreement if the licensee breaches the agreement" Bowmar Instrument Corp. v.

Continental microsystems, Inc., 497 F. Supp. 947 (S.D.N.Y. 1980). Evidence of a licensee's

non-payment of fees under a license agreement is sufficient to demonstrate that a licensor is likely

to succeed in proving that the licensee breached the agreement. Prudential Ins. Co. of Amer., Inc.

v. Ikomoni, 1996 WL 640915, *2 (S.D.N.Y. 1996). In addition, the License Agreement provided

that LLS could terminate based upon Chic's failure to pay royalties or upon any other material

breach that cannot be cured, such as Chic's already completed breaches related to its advertising,

manufacture, and sale of "Beach House" apparel. (Weiss Aff. at Ex. C, § 13.)

Here, Chic failed to pay to LLS the royalties required by section 7 of the License

Agreement. (Weiss Aff. at 13 - 14.) In addition, Chic violated numerous provisions of the

License Agreement by advertising and selling its "Beach House" line of apparel. (Id.at 15 -

17 .) Therefore, LSS terminated the License Agreement. (Id. at 19 and Ex. K.)

Once Chic received the notice of termination, it no longer had any right to use LLS's

Marks:Once this notice [of termination] was received, all defendants[former licensees] forefeited their limited right to use the[Licensor's] name or trademark in any fashion.

Bowmar Corp., 479 F. Supp. at 959.

Therefore, Chic's continued use of the Marks was unauthorized and constitutes a breach

of the License Agreement. See Bowmar, 497 F. Supp. at 957; Precision, Inc., 1989 WL 50796,

at *3.

(4) Chic's Only Apparent Defense, That An Oral Agreement Has Modified TheLicense Agreement, Is Without Merit

Chic's only apparent defense to LLS's trademark infringement claim is that the License

Agreement was modified by a November 29, 2001 Addendum. (See, e.g., April 3, 2003 letter

from Charles Godfrey, the Managing Partner of Chic, to Neil Weiss, the President of LLS,

attached as Ex. J to the Weiss A f f . ) This defense is without merit because the

purported addendum is a nullity.

The License Agreement was executed by Raymond Bialick for LLS and by Charles

Godfrey, as Manager, for Chic. The License Agreement is a 26-page document, plus

exhibits, drafted by attorneys and states that it may not be modified by an oral agreement:

19.2 This Agreement contains the entire understanding andagreement between the parties hereto with respect to the subjectmatter hereof, supersedes all prior oral or written understandingsand agreements relating thereto and may not be modified,discharged or terminated, nor may any of the provisions hereofbe waived, orally.

(Weiss Aff. at Ex. C, § 19.2.)

The purported addendum is one page and, most importantly, is not signed by LLS. The

unexecuted addendum is therefore without any legal effect:

[A] written agreement or other written instrument which contains aprovision to the effect that it cannot be changed, can be changedby an executory agreement unless such executory agreement is inwriting and signed by the party against whom enforcement of thecharge is sought or by his agent.

N.Y. General Obligatiohns Law§ 15-301(1); see also In re Marcus Brothers Textiles, Inc., 78

A.D.2d 800, 800-805, 433 N.Y.S.2d 114, 115-116 (1st Dep't 1980) (holding that unexecuted

memorandum did not modify a valid contract containing a "no modification" provision).

Even Chic's own financial statements, prepared after the purported November 29

Addendum, do not acknowledge the existence or legal validity of that addendum. Instead,

Chic's financial statements indicate that the amount of royalties owed by Chic to LLS are the

same as set forth in the License Agreement without any modification:

NOTE 7 -COMMITMENTS

The company [Chic] has entered into a royalty agreement with LeonLevin Sons, Inc. in connection with the purchase of the assets byChic, LLC. The agreement calls for the following payment ofroyalties:

Years 1 & 2Years 3+

1.5% of Net Sales6% of Net Sales

(Weiss Aff. at Ex. D.) Notably, this financial statement was prepared after November 29, 2001,

the date of the purported addendum, but does not acknowledge the existence of any such

addendum or modification to the terms of the January 5, 2000 License Agreement.

The only circumstance where the purported addendum would have modified the License

Agreement is if Chic had partially performed the terms of the alleged modification and such

performance was "unequivocally referable" to the new contract. Rose v. Spa Realty Associates,

42 N.Y.2d 338,343,397 N.Y.S.2d 922 (1977). In other words, Chic must demonstrate that its

actions are "unintelligible or at least extraordinary, explainable only with reference to the oral

agreement." Anostario, 59 N.Y.2d 662, 463 N.Y.S.2d 409, 410 (1986).

Here, Chic's actions are explainable as ordinary business decisions. For example, Chic has

claimed that its actions that are unequivocally referable to the oral agreement are (1) making

$20,000 monthly payments to LLS; (2) using LLS to supervise domestic production; (3) using

LLS for the production of cut and sew knits; and (4) causing a cash infusion in excess of

$400,000 into Chic. None of the above mentioned acts are extraordinary nor explainable only

with reference to the purported November 29, 2001 addendum. For instance, Chic's monthly $20

000 payments could constitute payments toward Chic's debt to LLS pursuant to the Promissory

Note executed by Chic in connection with the Asset Purchase agreement. According to that

Promissory Note, Chic must pay the principal sum of $675,000, plus all interest accrued, to LLS.

Similarly, Chic may have borrowed in excess of $400,000 from the Small Business Administration

for ordinary business reasons, such as to pay suppliers or to make payments owed to LLS.

As for LLS 's supervision of Chic's domestic production, Chic may have sought out LLS's

supervision in order to tum around its business. LLS operated profitably for more than 75 years

before licensing its Marks to Chic. Chic has yet to produce a profit. Instead Chic has suffered

substantial losses, including a loss of approximately $1.1 million in 2001. Thus, it is not

extraordinary nor unintelligible that Chic would seek out LLS to bring its wealth of experience to

the supervision of Chic's domestic production in the hope that Chic could reverse its trend of

mounting losses. In fact, more than 22 months before the purported addendum, Chic had already

appointed LLS as its exclusive buying agent in the United States. (Weiss Aff. at Ex. L.) As

Chic's exclusive U.S. buying agent, LLS already had substantial supervisory responsibilities,

including negotiating production timetables to satisfy order requirements and monitoring the

performance of sellers, manufacturers, and suppliers to ensure the high quality of garments

bearing LLS's Marks. (Id.)

Similarly, Chic may have used LLS for the production of cut and sew knits because of

LLS's proven track record in providing high quality knits or because LLS offered more favorable

prices than other suppliers. In fact, more than 22 months before the purported addendumChic

and LLS had entered into a requirements contract, whereby Chic agreed to use LLS as its sole

supplier for several styles of clothing. (Weiss Aff. at Ex. M.)

None of Chic's conduct is unintelligible or extraordinary.

Consequently, the purported November 29 addendum is a nullity. It was never valid and

cannot constitute a meritorious defense to LLS's claims for infringement, unfair competition,

breach of the License Agreement, and violation of New York's anti-dilution statute.

II. The Court Should Issue A Temporary Restraining Order AndPreliminary Injunction Because Chic's Unauthorized Use Of TheMarks Threatens LLS With Irreparable Harm

In addition to demonstrating that it will succeed on the merits, LLS is threatened with

irreparable harm by Chic's wrongful conduct. The Second Circuit has held that where, as here, a

former licensee makes unauthorized use of a trademark, then the licensor has lost control of its

trademark and this loss of control constitutes irreparable harm:

[I]rreparable harm exists when the party seeking the preliminaryinjunction shows that it will lose control over the reputation of itstrademark pending trial. Control of the trademark is crucial in thelicensing context because a licensor who fails to monitor its markrisks a later determination that it has been abandoned. If a trademarkowner allows licensees to depart from its quality or other standards,the public will be misled, and the trademark will cease to haveutility as an information device.

A trademark licensor is interested in controlling the use ofits mark by its licensees in order to preserve the marks' quality andits continued vitality.

* * *[I]t is that loss of control which is the very thing that constitutesirreparable harm in the licensing context.

-[FIND CASE WHERE THIS QUOTE IS FROM].

Irreparable harm is also present where, as here, a licensor has demonstrated that a former

licensee's use of its marks will likely cause confusion as to the source of a product:

The unauthorized use of a mark . . . by a former licensee invariablythreatens injury to the economic value of the goodwill and reputationassociated with a product. As a consequence, a licensor whoestablishes a likelihood of confusion as to product source in atrademark infringement suit simultaneously demonstrates therequisite irreparable harm essential to obtaining a preliminaryinjunction.

Church Scientology Int 'l, 794 F.2d at 443; see also Murjani Int'l, Ltd., 1987WL 151110, at*12.

Because a loss of control and a likelihood of confusion are inherent in infringement

actions brought under the Lanham Act, irreparable harm is presumed once a plaintiff has

demonstrated a likelihood of success on the merits of its Lanham Act claims. See e.g., Prudential

Ins. Co. of Am, Inc. v. Ikoni, 1996 WL 640915, *2 (S.D.N.Y. Nov. 6, 1996) ("injunctive relief to

prevent infringement is appropriate without any separate showing of irreparable harm"); contra

Precsion Tune, Inc. v. Pelter, 1969 WL 50796, *3 (N.Y. May 4, 1989) ("in Lanham Act violation

cases, courts have noted that the likelihood of customer confusion, impairment of plaintiffs

reputation and good will, and probable diversion of customers, combined with the difficulty of

proving actual monetary damages arising from Lanham Act injuries, justify a presumption of

irreparable injury").

In addition, a licensee's failure to make royalty payments has been held to constitute

irreparable harm. Id. at *3 ("Plaintiff [licensor] has sufficiently demonstrated irreparable injury

in that it no longer receives royalty payments to which it is entitled upon use of its identity and

trade or service marks").

Here, LLS has lost control of its distinctive Marks because Chic is using the Marks despite

that LLS has terminated the License Agreement. LLS has no means, other than this Court

granting injunctive relief, to prevent Chic from continuing to manufacture and sell apparel bearing

LLS's Marks. Furthermore, since Chic is using LLS's Marks, consumers are likely to be

confused as to whether LLS authorized Chic to produce such goods. This loss of control

and likelihood of confusion constitute irreparable harm as a matter of law. See Church of

Scientology Int'l, 794 F.2d at 53-54; Murjani Int'l, Ltd., 1987 WL 1511110, at *12. In

addition, LLS has demonstrated irreparable injury in that it is no longer receiving royalty

payments from Chic. Precision Tune, Inc., 1989 WL 50796, at *2.

Furthermore, LLS and Chic both recognized that injunctive relief would be required to

prevent any unlawful or unauthorized use by Chic of LLS's Marks. (See Weiss Aff. at Ex.

C.,§

14.1(a).) The License Agreement provides that LLS is not obligated to secure a bond nor

prove any actual damages when seeking such injunctive relief. (!d.)

CONCLUSION

For the foregoing reasons, LLS respectfully requests that the Court: (1) issue a

temporary restraining order that prohibits Chic from selling, destroying, or otherwise disposing

of any of its inventory and prohibiting Chic from manufacturing, producing, marketing,

advertising, distributing, or selling any goods or clothing bearing LLS's Marks; (2) issue a

preliminary injunction for the same relief except that Chic may, upon request by LLS, ship its

inventory to LLS; (3) award LLS its costs and expenses incurred in connection with obtaining

such injunctive relief; and (4) award any other and further relief that the Court deems just.