Second Circuit filings regarding dismissal of claims in Christian Louboutin SA v. Yves Saint...

7/30/2019 Second Circuit filings regarding dismissal of claims in Christian Louboutin SA v. Yves Saint Laurent, Inc.

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Case 1:11-cv-02381-VM Document 76 Filed 11/16/12 Page 9 of 21


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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - xChristian Louboutin S.A., Christian Louboutin,

L.L.C. and Christian Louboutin,

Plaintiffs/Counterclaim-Defendants,

vs.

Yves Saint Laurent America, Inc., Yves Saint

Laurent America Holding, Inc. and

Yves Saint Laurent S.A.S., et al.,

Defendants/Counterclaim-Plaintiffs.

:

:

:

:

:

:

:- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

Civil Action Number 11-cv-2381 (VM)

ECF Case

MEMORANDUM OF LAW OF DEFENDANTS/COUNTERCLAIM-PLAINTIFFS

IN SUPPORT OF MOTION TO DISMISS THEIR COUNTERCLAIMS VOLUNTARILY

DEBEVOISE & PLIMPTON LLP

David H. Bernstein ([email protected])

Jyotin Hamid ([email protected])Rayna S. Feldman ([email protected])

919 Third Avenue

New York, New York 10022Telephone 212-909-6696

Dated: New York, New York Counsel to Defendants and Counterclaim PlaintiffsOctober 16, 2012 Yves Saint Laurent America, Inc.,

Yves Saint Laurent America Holding, Inc.,

and Yves Saint Laurent S.A.S.



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Yves Saint Laurent America, Inc., Yves Saint Laurent America Holding, Inc. and Yves

Saint Laurent S.A.S. (collectively, YSL) respectfully submit this memorandum of law in

support of their motion to dismiss voluntarily their counterclaims against Christian Louboutin

S.A., Christian Louboutin L.L.C. and Christian Louboutin (collectively, Louboutin).

PRELIMINARY STATEMENT

In its September 5, 2012 ruling in this case, the U.S. Court of Appeals for the Second

Circuit directed that final judgment be entered in YSLs favor on all of Louboutins federal

trademark claims. The Court of Appeals ruled conclusively that the YSL monochromatic shoes

that Louboutin challenged in this lawsuit do not infringe any trademark rights of Louboutin.

As a result, the only issues remaining to be litigated in this case are YSLs counterclaims

against Louboutin. In light of YSLs conclusive victory in defeating Louboutins claims, and for

the reasons detailed herein, YSL believes it appropriate to dismiss its counterclaims voluntarily,

thus resolving what remains of this litigation and allowing the parties to close the book on this

litigation and refocus their attention on their respective fashion creations.

Counterclaims Seeking Cancellation. Four of YSLs counterclaims seek cancellation of

Louboutins U.S. Trademark Registration on various bases. This Court had subject matter

jurisdiction over those counterclaims only because Louboutin had asserted claims for trademark

infringement against YSL. With Louboutins claims now removed as a result of the Second

Circuit ruling, this Court no longer has subject matter jurisdiction with respect to YSLs

counterclaims seeking cancellation. Under controlling law in this Circuit, district courts lack

subject matter jurisdiction to adjudicate a claim for cancellation of a federal trademark

registration if no other basis for federal jurisdiction is present; instead, such claims must be

brought before the Trademark Trials & Appeals Board (the T.T.A.B.) of the United States



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Patent & Trademark Office. Accordingly, the counterclaims seeking cancellation should be

dismissed without prejudice.

Counterclaims for Tortious Interference and Unfair Competition. YSLs fifth and

sixth counterclaims, for tortious interference and unfair competition, are based on Louboutins

efforts in early 2011 to pressure certain retailers to return to YSL the red monochromatic shoes

challenged in this case. Although YSL maintains its view that such actions were wrongful, YSL

was able to mitigate some of its damages by re-selling the returned inventory at YSL boutiques

or through e-commerce. In light of that, and given its desire to refocus its energies on its

business and creative designs, YSL has decided that these claims are no longer worth pursuing.

Accordingly, YSL voluntarily dismisses those counterclaims with prejudice.

PROCEDURAL HISTORY

Louboutin filed its Complaint and moved for a preliminary injunction on April 7, 2011,

challenging four models of red monochromatic shoes sold by YSL, and asserting federal

trademark claims and related state law claims. YSL filed an Answer and Counterclaims on May

20, 2011, and an Amended Answer and Counterclaims on June 27, 2011. YSL asserted six

counterclaims: four seeking cancellation of Louboutins federal Trademark Registration on

various grounds, and the two for tortious interference and unfair competition, respectively, based

on Louboutins efforts in early 2011 to pressure certain retailers to return to YSL the red

monochromatic shoes challenged in this case.

On July 22, 2011, this Court held a hearing on Louboutins motion for a preliminary

injunction. Preceding the hearing was a period for expedited discovery and full briefing, but

both the discovery and the briefing were limited to issues raised by Louboutins motion; they did

not include any discovery or briefing on YSLs counterclaims. To date, no discovery of any kind

has been taken or exchanged on the counterclaims.



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Fordham Univ., 900 F.2d 12, 14 (2d Cir. 1990)); AET Rail Group, LLC v. Siemens Transp. Sys.,

Inc., No. 08-CV-6442, 2009 WL 5216960, at *2-3 (W.D.N.Y. Dec. 30, 2009) (applying Zagano

factors to motion seeking dismissal of counterclaims without prejudice).

II. The Counterclaims Seeking Cancellation Should Be Dismissed Without Prejudice.

Dismissal of YSLs counterclaims seeking cancellation of Louboutins federal

Trademark Registration is required because this Court no longer has subject matter jurisdiction

over YSLs counterclaims for cancellation. Under controlling law, a federal district court lacks

subject matter jurisdiction to adjudicate a claim for cancellation of a federal trademark

registration if no other basis for federal jurisdiction is present. See Nike, Inc. v. Already, LLC,

663 F.3d 89, 94, 98-99 (2d Cir. 2011), cert. granted, --- S. Ct. ---, 2012 WL 425184 (2012) (once

plaintiffs claims for trademark infringement were conclusively terminated, dismissal of

defendants counterclaim for cancellation was appropriate because court lacked subject matter

jurisdiction over counterclaims for cancellation). Although Louboutins claims against YSL

previously provided a basis for subject matter jurisdiction in the district court, that basis is no

longer present now that the Second Circuit has directed that final judgment be entered in YSLs

favor on all of Louboutins federal trademark claims.

Applying the Zagano factors, the dismissal of YSLs counterclaims seeking cancellation

should be without prejudice:

YSL has a reasonable explanation for seeking dismissal: The Second Circuitsruling has removed the basis for the Courts subject matter jurisdiction over

YSLs counterclaims.

YSL has brought this motion very promptly: YSL has filed this motion withinthree weeks of the Second Circuit issuing its mandate (on September 27).

There is no evidence that YSL asserted its counterclaims for cancellation ofLouboutins Trademark Registration in bad faith or to harass Louboutin. To thecontrary, YSL believed and this Court and the Second Circuit both agreed that

Louboutins Trademark Registration was not valid as previously registered.



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This action has not reached an advanced stage of proceedings, and no discoveryhas taken place with respect to any of YSLs counterclaims.

Because no discovery has taken place on these counterclaims, Louboutin wouldnot have to duplicate expenses if it were forced to relitigate YSLs claims for

cancellation in the future or in another forum (such as the T.T.A.B.).Furthermore, the law is clear in this Circuit that the mere prospect of a secondlawsuit is not a sufficent reason to deny a partys request for voluntary dismissal

without prejudice. Lopes v. First Unum Ins. Co., No. 09CV02642

(RRM)(SMG), 2012 WL 3887517, at * 1 (E.D.N.Y. Sept. 7, 2012) (citing Cone v.West Virigina Pulp & Paper Co., 330 U.S. 212, 217 (1947)); see also Charles A.

Wright & Arthur R. Miller, 9 Federal Practice and Procedure 2364, at 474-76

(3d ed. 2008)).

Accordingly, YSL respectfully submits that its counterclaims seeking cancellation of

Louboutins Trademark Registration should be dismissed without prejudice.

III. The Counterclaims For Tortious Interference and Unfair Competition Should Be

Dismissed With Prejudice.

YSLs counterclaims for tortious interference and unfair competition were brought as a

result of Louboutins efforts in early 2011 to pressure certain retailers to return to YSL the red

monochromatic shoes challenged in this case. Although YSL maintains its position that such

conduct was improper, YSL was able to mitigate some of its damages by re-selling the returned

inventory to its customers through YSL boutiques and through e-commerce. Now that the

Second Circuit has definitively rejected Louboutins claims against YSL, YSL prefers to refocus

its energies on its business and creative designs, and has determined that these claims are no

longer worth pursuing. As such, YSL is willing to dismiss these counterclaims with prejudice.

Because Louboutin can have no conceivable objection to the dismissal of these claims

with prejudice, YSL respectfully requests that the Court dismiss its counterclaims for tortious

interference and unfair competition with prejudice.



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United States Courthouse, United States District Court Southern District of New York, 500

Pearl Street, New York, New York, for an order pursuant to Fed. R. Civ. P. 41(a)(2) and (c):

(1) dismissing YSLs counterclaims for cancellation without prejudice; and (2) dismissing

YSLs counterclaims for tortious interference and unfair competition with prejudice, and for

such other and further relief as the Court may deem just and proper.

Dated: New York, New York

October 16, 2012

DEBEVOISE & PLIMPTON LLP

/s/ David H. Bernstein____________David H. Bernstein ([email protected])

Jyotin Hamid ([email protected])

Rayna S. Feldman ([email protected])DEBEVOISE & PLIMPTON LLP

919 Third Avenue

New York, New York 10022(212) 909-6696

Attorneys for Yves Saint Laurent America, Inc.,

Yves Saint Laurent America Holding, Inc.,

and Yves Saint Laurent S.A.S.

To: Harley I. Lewin, Esq.

McCarter & English, LLP245 Park Avenue, 27

thFloor

New York, New York 10167

Lee Carl Bromberg, Esq.

McCarter & English, LLP265 Franklin Street

Boston, MA 02110


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