Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-00604/USCOURTS-casd-3_12-cv-00604-11/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement (Lanham Act)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JAMES W. BRADY and PATRICIA

M. BRADY,

Plaintiffs,

CASE NO. 3:12-cv-0604-GPC-KSC

ORDER GRANTING GRENDENE’S

PARTIAL RENEWED MOTION

FOR SUMMARY JUDGMENT, OR,

IN THE ALTERNATIVE, PARTIAL

SUMMARY JUDGMENT

[ECF No. 216]

v.

GRENDENE USA, INC., a Delaware

Corporation, and GRENDENE S.A., a

Brazil Corporation,

Defendants.

AND RELATED COUNTERCLAIMS

I. INTRODUCTION

This is a trademark infringement action. Defendants Grendene USA, Inc. and

Grendene S.A. (collectively, “Grendene”) previously moved for summary judgment

based on a settlement agreement and an affirmative defense of laches. (ECF No. 72.) 

Because there were disputes of material fact regarding the validity of the trademark

assignments among Grendene and its predecessors, the Court denied that motion (the

“November 12 Order”). (ECF No. 158.) Grendene now moves the Court to reconsider

its initial ruling. (ECF No. 216.) Plaintiffs James W. Brady and Patricia M. Brady

(collectively, the “Bradys”) oppose, arguing that Grendene’s motion is both untimely

and substantively flawed. (ECF No. 266.) A hearing on Grendene’s motion was held

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on May 22, 2015. (ECF No. 269.) Upon review of the moving papers, admissible

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evidence, oral argument, and applicable law, the Court GRANTS Grendene’s motion

for summary judgment because the Court finds that Grendene has been validly assigned

the ’543 mark and therefore the Settlement Agreement bars the Bradys’ causes of

action against Grendene.

II. BACKGROUND

The factual and procedural background of this case is detailed in the Court’s

November 12 Order. (ECF No. 158, at 2–7.) In sum, the Bradys and the Ipanema Shoe

Corporation (“ISC”) both obtained registration in the mark “IPANEMA”; the Bradys’

mark was for swimwear, IPANEMA, Registration No. 1,778,404 (the “’404 mark”),

and ISC’s mark was for footwear, IPANEMA, Registration No. 1,908,543 (the “’543

mark”). (Id.) After a dispute arose between them regarding the IPANEMA mark, but

the Bradys, through their company Made in Brazil, Inc. (“MIB”), and ISC entered into

a settlement agreement (the “Settlement Agreement”). (Id.) The ’543 mark was then

purportedly assigned by ISC to Utopia Marketing Inc. (“Utopia”), then by Utopia to

Consolidated Shoe Corporation (“CSC”), and finally by CSC to Grendene. (Id.) In the

November 12 Order, the Court found that the evidence submitted at the time indicated

a dispute of material fact regarding the validity of these assignments. (Id. at 12–13)

Grendene, citing new evidence, now argues that: (1) these assignments were valid, (2)

which makes Grendene a successor to ISC under the Settlement Agreement, and (3) the

Settlement Agreement bars the Bradys’ claims against Grendene. (ECF No. 216.)

Based on this argument, Grendene asserts that it is entitled to summary judgment on

all five of the Bradys’ causes of action. (Id.) The Bradys counter that: (1) at least some

of these assignments were invalid, (2) which means that Grendene is not a successor

to ISC under the Settlement Agreement, and (3) even if Grendene were ISC’s

The Bradys moved for leave to file a sur-reply. (ECF No. 260.) Good cause 1

appearing, the Bradys’ ex parte motion is GRANTED and the Court considers the

arguments contained in their sur-reply, (ECF No. 260-1). Additionally, the parties have

submitted post-hearing briefs, (ECF Nos. 270, 271), which the Court also considers.

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successor, the Settlement Agreement bars the sale of Grendene’s sandals, which forms

the basis of the Bradys’ causes of action. (ECF No. 266.)

III. LEGAL STANDARD

A. Summary Judgment

Federal Rule of Civil Procedure 56 empowers the Court to enter summary

judgment on factually unsupported claims or defenses, and thereby “secure the just,

speedy and inexpensive determination of every action.” Celotex Corp. v. Catrett, 477

U.S. 317, 325, 327 (1986); FED.R.CIV. P. 56. Summary judgment is appropriate if the

“pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to judgment as a matter of law.” FED. R. CIV. P.

56(c). A fact is material when it affects the outcome of the case. Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986).

The moving party bears the initial burden of demonstrating the absence of any

genuine issues of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy

this burden by demonstrating that the nonmoving party failed to make a showing

sufficient to establish an element of his or her claim on which that party will bear the

burden of proof at trial. Id. at 322–23. If the moving party fails to bear the initial

burden, summary judgment must be denied and the Court need not consider the

nonmoving party’s evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159–60

(1970).

Once the moving party has satisfied this burden, the nonmoving party cannot rest

on the mere allegations or denials of his pleading, but must “go beyond the pleadings

and by her own affidavits, or by the ‘depositions, answers to interrogatories, and

admissions on file’ designate ‘specific facts showing that there is a genuine issue for

trial.’” Celotex, 477 U.S. at 324 (citing FED. R. CIV. P. 56 (1963)). If the non-moving

party fails to make a sufficient showing of an element of its case, the moving party is

entitled to judgment as a matter of law. Id. at 325. “Where the record taken as a whole

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could not lead a rational trier of fact to find for the nonmoving party, there is no

‘genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.

574, 587 (1986) (citing FED. R. CIV. P. 56 (1963)). In making this determination, the

Court must “view [] the evidence in the light most favorable to the nonmoving party.”

Fontana v. Haskin, 262 F.3d 871, 876 (9th Cir. 2001). The Court does not engage in

credibility determinations, weighing of evidence, or drawing of legitimate inferences

from the facts; these functions are for the trier of fact. Anderson, 477 U.S. at 255.

B. Reconsideration

Under Federal Rules of Civil Procedure 59 and 60, federal district courts may

reconsider final orders to correct “manifest errors of law.” Turner v. Burlington N.

Sante Fe R.R., 338 F.3d 1058, 1063 (9th Cir. 2003). Generally, parties must show

either: (1) an intervening change in the law; (2) additional evidence that was not

previously available; or (3) that the prior decision was based on clear error or would

work manifest injustice. Marlyn Natraceuticals, Inc. v. Mucos Pharma GmbH & Co.,

571 F.3d 873, 880 (9th Cir. 2009); Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263

(9th Cir. 1993); Pyramid Lake Paiute Tribe of Indians v. Hodel, 882 F.2d 364, 369 n.5

(9th Cir. 1989).

Reconsideration is an “extraordinary remedy, to be used sparinglyin the interests

of finality and conservation of judicial resources.” Kona Enters., Inc. v. Estate of

Bishop, 229 F.3d 877, 890 (9th Cir. 2000). “‘A motion for reconsideration is not an

opportunity to renew arguments considered and rejected by the court, nor is it an

opportunity for a party to re-argue a motion because it is dissatisfied with the original

outcome.’” Fed. Trade Comm’n v. Neovi, Inc., No. 06-cv-1952-JLS-JMA, 2009 WL

56130, at *2 (S.D. Cal. Jan. 7, 2009) (quoting Devinsky v. Kingsford, No. 05-cv-2064-

PAC, 2008 WL 2704338, at *2 (S.D.N.Y. July 10, 2008)).

In addition to these substantive standards, Civil Local Rule 7.1.i.1 requires a

party moving for reconsideration to submit an affidavit or certified statement of an

attorney: 

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setting forth the material facts and circumstances surrounding each prior

application, including inter alia: (1) when and to what judge the

application was made, (2) what ruling or decision or order was made

thereon, and (3) what new or different facts and circumstances are claimed

to exist which did not exist, or were not shown, upon such prior

application.

CivLR 7.1.i.1. Civil Local Rule 7.1.i.2 provides that “any motion or application for

reconsideration must be filed within twenty-eight (28) days after the entry ofthe ruling,

order or judgment sought to be reconsidered.” CivLR 7.1.i.2.

IV. DISCUSSION

Grendene’s argument consists of three parts: (1) the Settlement Agreement bars

the Bradys from suing ISC’s successors over the use of the IPANEMA mark on any

footwear, (2) the successor to ISC is the entity that has been validly assigned the ’543

mark, and (3) Grendene has been validly assigned the ’543 mark. (ECF No. 216-1.) The

Court addresses these arguments in turn after it addresses the Bradys’ objections

regarding timeliness and reconsideration. (See ECF No. 266.)

A. Timeliness

The Bradys argue that Grendene’s motion is untimely for failure to comply with

Local Rule 7.1.i.2 . (ECF No. 266, at 7–8.) This Court denied Grendene’s initial

summary judgment motion on November 12, 2014. (ECF No. 158.) Grendene filed its

motion for reconsideration on April 7, 2015, far outside of Local Rule 7.1.i.2’s 28 day

window. (ECF No. 216.) Though Grendene styles its present motion as a motion for

reconsideration in the alternative, the Court finds that, because the present motion for

summary judgment seeks the same relief that thisCourt initially denied, (compare ECF

No. 216 with ECF No. 158), Local Rule 7.1(i)(2) applies to Grendene’s motion. 

However, Federal Rule of Civil Procedure 6(b)(1) provides that an extension of time

may be granted for “good cause.” FED. R. CIV. P. 6(b)(1). The Court finds that

Grendene has satisfied Rule 6(b)(1)’s good cause requirement because the factual

record has expanded since the Court’s initial ruling, including the deposition ofseveral

witnesses. (See ECF No. 254, at 4); see also Hoffman v. Tonnemacher, 593 F.3d 908,

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911–12 (9th Cir. 2010) (quoting Whitford v. Boglino, 63 F.3d 527, 530 (7th Cir. 1995)

(per curiam)) (“A renewed or successive summary judgment motion is appropriate

especially if . . . [there is] the availability of new evidence or an expanded factual

record . . . .”) (alterations in original). Accordingly, the Court finds good cause to

excuse Grendene’s failure to comply with Local Rule 7.1.i.2’s 28 day requirement.

B. Reconsideration

TheBradys next argue that Grendene’s motion isimproper because the evidence

presented by Grendene is not “newly discovered.” (ECF No. 266, at 7–8.) However,

reconsideration is “addressed to the sound discretion of the trial court,” Thompson v.

Housing Authority of City of L.A., 782 F.2d 829, 832 (9th Cir. 1986), and the Court

finds it appropriate to consider Grendene’s motion based on the fact that the factual

record has expanded. See Whitford, 63 F.3d at 530.

C. The Settlement Agreement

The parties have conflicting interpretations of the Settlement Agreement. The

Bradys contend that it bars Grendene’s current sale of sandals bearing the IPANEMA

mark. (ECF No. 266, at 16–18.) Grendene contendsthat the Settlement Agreement bars

the Bradys’ trademark causes of action against Grendene. (ECF No. 216-1, at 18.)

1. The Bradys’ Interpretation

The Bradys argue that two phrases constitute “terms” of the Settlement

Agreement: (1) a whereas clause, and (2) a statement in the Letter of Consent that the

Settlement Agreement obligated MIB to execute. (ECF No. 266, at 17.) The Bradys

argue that these statements “reflect[] the parties’ intent that ISC would be permitted to

register the mark for footwear, so long as its use remained in channels of trade distinct

from the Bradys and ISC did not enter the swimwear and activewear market.” (Id.) The

Court disagrees.

First, the Bradys to a point a whereas clause that states that “the goods offered

by ISC and MIB [the Bradys] travel in distinct channels of trade such that consumers

are not likely to be confused by each party’s use of its respective trademark.” (ECF No.

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94-5.) However, this statement is not a “term” of the Settlement Agreement. Under

New York law, which governs the Settlement Agreement, (ECF No. 94-5, Ex. 5, at 3),

statements in “whereas” clauses do not “create any right beyond those arising from the

operative terms of the document.” Grand Manor Health Related Facility, Inc. v.

Hamilton Equities Inc., 885 N.Y.S.2d 255, 256 (N.Y. App. Div. 2009) (citation

omitted); see also Ross v. Ross, 253 N.Y.S. 871, 882 (N.Y. App. Div. 1931) (“The

recitals in a contract form no part thereof, and at most indicate but the purposes and

motives of the parties.”). While “‘whereas’ clauses may be useful in interpreting an

ambiguous operative clause,” the Bradys do not point to any ambiguous operative

clause within the Settlement Agreement. Grand Manor, 885 N.Y.S.2d at 256.

Second, the Bradys to point to the Letter of Consent that the Settlement

Agreement obligated them to file with the USPTO which states that ISC “has no plans

to enter the swimwear and activewear marke.” (ECF No. 94-6.) The Settlement

Agreement only obligated MIB to “execute[]” the Letter of Consent and contains no

indication that the words in the Letter of Consent bound ISC in any way. (ECF No. 94-

5, Ex. 4, at 2.) While the Bradys argue that the Letter of Consent was “incorporated,”

(ECF No. 266, at 17), there is no indication anywhere in the Settlement Agreement that

the language in the Letter of Consent would create rights between the parties or act as

operative terms of the document. Accordingly, the Court finds that neither of the

statements cited by the Bradys are operative clauses and thus rejects the Bradys’

interpretation of the Settlement Agreement.

2. Grendene’s Interpretation

Grendene argues that the Bradys’ trademark causes of action against Grendene

are barred by the Settlement Agreement. (ECF No. 216-1, at 18.) There is no dispute

that the sandals sold by Grendene constitute “footwear.” (ECF No. 93, at 23

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(“Grendene’s beach sandals are [] footwear . . . .”).) The Settlement Agreement

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obligates the Bradys to “make no objection, formally or informally, to the use by ISC,

its affiliates, predecessors and successors of the term IPANEMA as a trademark in the

selling of footwear as long as such use is in accordance with the terms of this

Agreement.” (ECF No. 94-5, Ex. 4, at 2.) Having rejected the Bradys’ interpretation of

the Settlement Agreement, the Court findsthat the agreement does bar the Bradys from

suing ISC’s successors over their use of the IPANEMA mark on any footwear. The

Court now turns to the issue of whether Grendene is a successor to ISC under the

Settlement Agreement.

D. Assignment Validity

Grendene argues that it is the successor to the Settlement Agreement because it

has been validly assigned the ’543 mark. (ECF No. 216-1.) The Bradys argue three

reasons why Grendene does not have a valid assignment of the ’543 mark: (1) the

assignment between ISC and Utopia was invalid, (2) Utopia and Grendene abandoned

the IPANEMA mark, and (3) the assignment between CSC and Grendene was invalid.

(ECF No. 266, at 4, 8–15.)

1. Utopia’s Sales

As an initial matter, there is a disagreement regarding whether the facts show

that Utopia sold shoes bearing the IPANEMA mark, and, if so, to what extent those

shoes differed from those sold by ISC. The Bradys rely primarily on three things: (1)

Utopia’s statements to the Securities and Exchange Commission (the “SEC”), (2)

statements by a former Utopia employee, and (3) an initial answer given by Utopia’s

former CEO during his deposition. (ECF No. 266, at 8–11.)

First, Utopia’s statements to the SEC do not, as the Bradys’ contend, show that

The parties do, however, dispute whether Grendene’s sandals can also be 2

characterized as either “swimwear” or “activewear.” (See ECF No. 93, at 23.) Because

the Court has rejected the Bradys’ interpretation of the Settlement Agreement, this

dispute is irrelevant for purposes of the present motion.

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Utopia abandoned the goodwill ofthe IPANEMA mark. (See ECF No. 266, at 10; ECF 3

No. 260-1, at 1.) Though Utopia stated to the SEC that it “does not intend to continue”

and “is in fact not continuing the business formerly operated by” ISC, other language 4

in Utopia’s Form 8-K/A letter explicitly makes clear that Utopia did intend to sell

footwear bearing the IPANEMA mark, just that the footwear would be different from

that sold by ISC. (ECF No. 95-14, Ex. 13, at 599 (“[Utopia] intends to utilize the

Ipanema brand for a different line of shoe products.”).) As the Court has previously

noted, assignment validity turns not onwhether differences exist between productssold

under the mark, but on what those differences are. (See ECF No. 158, at 11); see also

PepsiCo, Inc. v. Grapette Co., 416 F.2d 285, 288 (8th Cir. 1969). Though Utopia may

have described its decision to alter the type offootwear sold under the IPANEMA mark

as “not continuing the business formerly operated by” ISC, this statement’s actual

meaning is clarified by the rest of Utopia’s Form 8-K/A letter and the evidence does

show that Utopia actually sold footwear bearing the IPANEMA mark. (See ECF No.

216-7, Ex. C, 22:8–23:5)

Second, the Bradys’ arguments regarding the statements of Dennis Mulcahy, a

former Utopia employee, fail for the same reason. While Mulcahy stated that there were

“significant changes” when the Utopia started selling IPANEMA footwear, (ECF No.

229-2, Ex. 1, at 20:4–21:11), what matters is what those changes were. Moreover,

Mulcahy did in fact describe the shoes sold by Utopia, (see ECF No. 216-7, Ex. C,

22:8–23:5), which allows the Court to compare them to the footwear sold by ISC and

As the Court discussed in the November 12 order, a mark must be assigned 3

with its goodwill to constitute a valid assignment. (ECF No. 158, at 11.) “To determine

whether the goodwill was assigned with the mark, the Court makes a case-by-case

determination whether the products or services offered by the assignee under the mark

are substantially similar to those that were offered by the assignor under the mark.” (Id.

(citations omitted).)

These statements are somewhat inconsistent because the initial use of the

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phrase “does not intend to continue” arguably shows a prospective intent to abandon,

whereas the later use of phrase “is . . . not continuing” arguably shows an intent not to

resume. See Electro Source, LLC v. Brandess-Kalt-Aetna Group, Inc., 458 F.3d 931,

937 (9th Cir. 2006). However, this inconsistency is immaterial due to the rest of

Utopia’s statements to the SEC, as discussed in this section.

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CSC to determine whether there was a valid assignment.

Third, the statement by Utopia’s former CEO is not evidence that Utopia did not

sell footwear bearing the IPANEMA mark. The full response of Utopia’s former CEO

was “I don’t remember [whether Utopia sold footwear under the IPANEMA mark], but

I think [Utopia] did.” (ECF No. 229-4, Ex. 3, at 17:4–9.) Moreover, the statements of

Mulcahy, as well as Utopia’s other filings with the SEC, make clear that Utopia did sell

shoes bearing the IPANEMA mark. As the evidence shows that Utopia sold shoes

bearing the IPANEMA mark, the Court now turns to whether Utopia abandoned the

mark and whether Grendene obtained a valid assignment.

2. Abandonment

TheBradys primary argument isthat both Utopia and Grendene have abandoned

the IPANEMA mark. (ECF No. 266, at 4, 11.) Abandonment “requires an intent not to

resume trademark use, as opposed to a prospective intent to abandon the mark in the

future.” Electro Source, 458 F.3d at 937; 15 U.S.C. § 1127. Additionally, three

consecutive years of nonuse constitutes prima facie evidence of abandonment. 15

U.S.C. § 1127. If the party asserting abandonment establishes a prima facie case of

abandonment, “a rebuttable presumption of abandonment is created.” Abdul-Jabbar v.

Gen. Motors Corp., 85 F.3d 407, 411 (9th Cir. 1996). This presumption places the

burden of production on the party opposing the allegations of abandonment.

Emergency One, Inc. v. Am. FireEagle Ltd., 228 F.3d 531, 535–37 (4th Cir. 2000). The

burden is on the party asserting abandonment to “strictly prove” its claim. Electro

Source, 458 F.3d at 935 n.2 (citations omitted). The Ninth Circuit has not yet

articulated whether this high standard requires “clear and convincing” evidence or a

preponderance of the evidence. FreecycleSunnyvale v. Freecycle Network, 626 F.3d

509, 514–15 (9thCir. 2010). However, the Court need not determine which evidentiary

standard is applicable because the Bradys have failed to carry their burden under either

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standard.

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First, the Bradys’ argue that Utopia’s statement to the SEC, that Utopia “does not

intend to continue to operate the business of Ipanema,” but does “intend[] to utilize the

Ipanema brand for a different line of shoe products,” constitute abandonment. (ECF

No. 95-14, Ex. 13, at 599.) The Court does not find that Utopia’s statements constituted

abandonment. As discussed above, the phrase “does not intend to continue,” if

anything, is a prospective intent to abandon because it connotesthat Utopia was, at the

time of the statement, operating Ipanema’s business. Even if the first phrase, in

isolation, could be construed as an intent not to resume use, Utopia’s follow up

statement, that it “intends to utilize the Ipanema brand for a different line of shoe

products,” makes clear that Utopia did intend to keep using the mark, albeit on

different footwear. This isfurther supported by Utopia’s November 11, 2000, Form10-

QSB filing with the SEC, which stated that during the nine months prior to September

30, 2000, Utopia generated $6,644,000 selling products under the NAKEDFEET and

IPANEMA marks. (ECF No. 108-10, at 131–32.)

Second, the Bradys argue that Grendene “did nothing at all with the ‘Ipanema’

trademark in the U.S. [from approximately 2007 to 2011].” (ECF No. 266, at 5.)

However, thisis not the case as Grendene licensed the ’543 mark back to CSC in 2007,

and CSC sold IPANEMA footwear under the mark through 2009. (ECF No. 108-15,

Ex. M; ECF No. 216-24, Ex. M.) Grendene then started to sell footwear under the

IPANEMA mark in the U.S. beginning in 2010. (ECF No. 95-16, at 724.) Thus there

is no prima facie evidence of abandonment by Grendene because there is no three year

period of nonuse. See 15 U.S.C. § 1127; see also FreecycleSunnyvale, 626 F.3d at 514

The Court notes that while Grendene argues that “clear and convincing”

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evidence is the standard, (ECF No. 216-1, at 12), the Bradys do not argue for a specific

standard. (See ECF No. 266.)

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(only a “naked license” results in abandonment).6

3. Assignment

For a trademark assignment to be valid, the Lanham Act requires that the mark

be assigned “with the good will of the business in which the mark is used, or with that

part of the good will of the business connected with the use of and symbolized by the

mark.” 15 U.S.C. § 1060(a)(1); E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d

1280, 1289 (9th Cir. 1992). An assignment without the goodwill is referred to as an

“assignment in gross.” E. & J. Gallo Winery, 967 F.2d at 1289. To determine whether

the goodwill was assigned with the mark, the Court makes a case-by-case

determination whether the products or services offered by the assignee under the mark

are “substantially similar” to those that were offered by the assignor under the mark.

Sugar Busters LLC v. Brennan, 177 F.3d 258, 266 (5th Cir. 1999) (citations omitted);

see also PepsiCo, 416 F.2d at 288; Glow Industries, Inc. v. Lopez, 273 F. Supp. 2d

1095, 1108 (C.D. Cal. 2003) (citations omitted). However, even if a mark’s goodwill

is not transferred contemporaneously with the assignment of the mark’s rights, that

does not necessarily invalidate the assignment. See RESTATEMENT (THIRD) OF UNFAIR

COMPETITION § 34 cmt. f (1995). Because a mark retains its meaning even after an

assignment in gross, an eventual assignment of the mark and the goodwill to the same

assignee, while the mark retains its meaning, will “patch up the transaction.” 3 J.

THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION §

18:17 (4th ed. 1996). This makes sense because there are essentially two pieces to a

valid trademark in the context of an assignment: the trademark rights and the

trademark’s goodwill. Though assigning the rights without the goodwill constitutes an

invalid assignment, a subsequent assignment of the mark’s goodwill to the same entity

As the Bradys do not argue or provide evidence that Grendene’s license back 6

to CSC was a naked license, (see ECF No. 266), and “ the proponent of a naked license

theory of trademark abandonment must meet a ‘stringent standard of proof,’” the Court

does not find that the license back was a naked license. FreecycleSunnyvale, 626 F.3d

at 514 (quoting Barcamerica Intern. USA Trust v. Tyfield Importers, Inc., 289 F.3d

589, 596 (9th Cir. 2002)).

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while the mark retains meaning would create a valid assignment even though the initial

assignment was not valid. See id. While the November 12 Order found disputes of

material fact on thisissue based on certain statements and a lack of evidence, (see ECF

No. 158, at 12–13), the parties now present additional evidence.

The Court notes that the caselaw surrounding whether an assignment is an

invalid assignment in gross is not a model of consistency. Some decisions have found

differences between productsin certain categories are substantial enough to invalidate

an assignment, including: (1) musical groups, Marshak v. Green, 746 F.2d 927 (2d Cir.

1984); (2) syrups, PepsiCo, 416 F.2d 285; (3) alcoholic beverages, Atlas Beverage Co.

v. Minneapolis Brewing Co., 113 F.2d 672 (8th Cir. 1940); (4) baking powders, Indep.

Baking Powder Co. v. Boorman, 175 F. 448 (C.C.D.N.J. 1910); (5) soft drinks, W. T.

Wagner’s Sons Co. v. Orange Snap Co., 18 F.2d 554 (5th Cir. 1927); and (6) shoes,

Clark & Freeman Corp. v. Heartland Co. Ltd., 811 F. Supp. 137 (S.D.N.Y. 1993).

Other decisions have found that differences between products in other categories are

not substantial enough to invalidate an assignment, including: (1) drinking and dining

establishments, Brewski Beer Co. v. Brewski Brothers Inc., 47 U.S.P.Q.2d 1281

(T.T.A.B. 1998); (2) check guarantee cards, Visa, U.S.A., Inc., v. Birmingham Trust

Nat’l Bank, 696 F.2d 1371 (Fed. Cir. 1982); (3) chicken breeds, Hy-Cross Hatchery,

Inc. v. Osborne, 303 F.2d 947 (C.C.P.A. 1962); and (4) tobacco formulas, Beech-Nut

Packing Co. v. P. Lorillard Co., 299 F. 834 (D.N.J. 1924).

While the Bradys argue that the latter cases found that “the specific services or

goods were essentially identical,” (ECF No. 266, at 15–16), the Court is not so

convinced. For example, the Hy-Cross court specifically noted that, even though the

assignor only sold a single breed of chicken, the assignment was valid no matter what

chicken breed the assignee sold. 303 F.2d at 950. While there exist many different

types of shoes, the product category at issue in this lawsuit, the same is true of chicken

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breeds. As the caselaw in this area provides conflicting guidance, the Court turns to 7

the basic tenets of trademark law.

“The ultimate concern in all cases is the welfare of the public.” PepsiCo, 416

F.2d at 289. Indeed, the “central purpose” of the various invalidity provisions “is

protection against consumer confusion.” Syntex Labs., Inc. v. Norwich Pharmacal Co.,

315 F. Supp. 45, 54 (S.D.N.Y. 1970) (citing PepsiCo, 416 F.2d at 288). Based on the

fundamental purposes oftrademark law, the analysis inClark &Freeman isinstructive.

In that case, the assignor had built a reputation selling fashionable women’s shoes

under the mark. Clark & Freeman, 811 F. Supp. at 141 (“Sears sold only women’s

pixie boots under the mark . . . .”). The assignee then applied the mark only to men’s

shoes. Id. (“[P]laintiffs immediately applied it only to men’s shoes, then later to men’s

hiking boots.”) Based on the differences between the products, the Clark & Freeman

court found that the “markets for the two goods are substantially distinct” because “it

is unlikely that men buying plaintiffs’ ‘Heartland’ shoes would be considering a

reputation for footwear generally that Sears built by selling women’s boots.” Id.

The Bradys argue that the shoes sold by CSC under the IPANEMA mark, “high

fashion women’s shoes,” differ significantly from those sold by Grendene under the

IPANEMA mark, “plastic beach sandals.” (ECF No. 266, at 5–6.) The Court disagrees.

The products marketed by ISC under the IPANEMA mark were fashionable women’s

footwear that retailed for approximately $25 to $50. (ECF No. 216-5, Ex. A,

22:2–23:24, 135:9–14.) The products marketed by Utopia under the IPANEMA mark

were fashionable women’s shoes, boots, and sandals that retailed for approximately

$18.50 to $50. (ECF No. 216-7, Ex. C, 22:8–23:5.) The products marketed by CSC

under the IPANEMA mark were fashionable women’s footwear that retailed for

According to data collected by the United Nations’ Domestic Animal Diversity

7

Information System, there are 53 breeds of chicken in the United States and 2,633

breeds of chicken acrossthe globe. Number of Breeds by Species and Country, UNITED

N A T I O N S F O O D A N D A G R I C U L T U R E O R G A N I Z A T I O N , 

http://dad.fao.org/cgi-bin/EfabisWeb.cgi?sid=1b9408faaf38cf3a67973ce670aa7736,

reportsreport10 (last visited May 15, 2015).

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approximately $40 to $50. (ECF No. 216-21, Ex. J.) The products marketed by

Grendene under the IPANEMA mark are plastic men’s, women’s, and children’s

sandals that retail for approximately $18 to $55. (ECF No. 216-29, Ex. Q); Ipanema,

GRENDENE USA, INC., http://www.ipanemausa.com/ (last visited May 15, 2015).

Based on the undisputed evidence presented, the Court finds that the products

sold by ISC, Utopia, CSC, and Grendene are “substantially similar.” Sugar Busters,

177 F.3d at 266. The productssold by all the companiesinvolved fashionable women’s

footwear at a low to medium price point. Though Grendene has expanded into men’s

and children’s footwear, it too sells women’s footwear. This standsin contrast to Clark

& Freeman where the assignor sold only fashionable women’s footwear and the

assignee sold only functional men’s footwear, though both sold boots. 811 F. Supp. at

141. While the Bradys make much of the different materials used by Grendene, plastic

in contrast to its predecessors’ use of leather, wood, and cork, and the different type of

women’s shoes sold by Grendene, “flip-flops” rather than “high fashion dress sandals,”

(ECF No. 266, at 1, 6, 13), consumers purchasing Grendene’s shoes under the

IPANEMA mark would still likely consider the reputation built by Grendene’s

predecessors because they too sold fashionable women’s shoes at a similar price point.

Cf. Clark & Freeman, 811 F. Supp. at 141. Moreover, the statements of Grendene’s

attorneys made before the United States Patent and Trademark Office and cited by the

Bradys, (ECF No. 260-1, at 2 (quoting (ECF No. 95-6, Ex. 5, at 496))), are irrelevant

for two reasons: (1) the Trademark Trial and Appeal Board rejected this argument,

(ECF No. 95-7, at 503 (“[Grendene’s] sandals, because they are encompassed within

the identification ‘footwear,’ must be considered legally identical to this cited

registrant’s goods . . . .”)); and (2) likelihood of confusion analysis differs from

assignment in gross analysis, compare Sugar Busters, 177 F.3d at 266 (requiring

substantial similarity for a valid assignment) with (ECF No. 95-7, at 502 (“It is well

settled that goods need not be similar . . . to support a finding of likelihood of

confusion.”)). Accordingly, the Court finds that Grendene has obtained a valid

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assignment of the ’543 mark. As the parties do not dispute that the successor to ISC’s

Settlement Agreement rights is the person or entity who has been validly assigned the

’543 mark thatISC obtained as a condition precedent to the Settlement Agreement, (see

ECF No. 93, at 14–15), the Court finds that Grendene is a successor to ISC under that

agreement. As all five of the Bradys’ causes of action against Grendene in this case are

based on Grendene’s use of the IPANEMA mark on Grendene’s sandals, (see ECF No.

4), the Court finds that all those causes of action are barred by the Settlement

Agreement. Accordingly, the Court GRANTS Grendene summary judgment on all five

of the Bradys’ causes of action.8

E. Grendene’s Counterclaims

Because the Court has granted Grendene summary judgment on all of the

Bradys’ causes of action, the Court finds good cause to sua sponte consider whether 

Grendene’s counterclaims, (ECF No. 56, at 12–13), should be dismissed for either lack

of standing or mootness. See CIBER, Inc. v. CIBER Consulting, Inc., 326 F. Supp. 2d

886 (N.D. Ill. 2004) (dismissing the defendant’s counterclaims after the plaintiff’s

trademark infringement causes of action were dismissed with prejudice); but see

Secular Orgs. for Sobriety, Inc. v. Ullrich, 213 F.3d 1125, 1129, 1131–32 (9th Cir.

2000) (finding a trademark cancellation counterclaim not moot even after judgment

was entered in favor of the defendant on all of the plaintiff’s causes of action).

V. CONCLUSION AND ORDER

Based on the reasons stated above, IT IS HEREBY ORDERED that:

1. Grendene’s motion for summary judgment, (ECF No. 216), is

GRANTED as to all five of the Bradys’ causes of action; and

2. Given the Court’s grant of summary judgment in favor of Grendene, the

Court finds good cause to sua sponte consider whether Grendene’s

counterclaims should be dismissed. The Court sets this issue for

As the Court is granting Grendene summary judgment based on the Settlement

8

Agreement, the Court does not reach Grendene’s laches or interlocutory appeal

arguments. (See ECF No. 216-1, at 18–25.)

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consideration at a hearing on July 31, 2015, at 1:30 p.m. The partiesshall

each file an opening brief on or before June 19, 2015, and may each file

a responsive brief on or before July 3, 2015.

DATED: June 3, 2015

HON. GONZALO P. CURIEL

United States District Judge

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