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1. Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co., 2022 U.S. Dist. LEXIS 230852
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Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
United States District Court for the Southern District of New York
December 22, 2022, Decided; December 22, 2022, Filed
15 Civ. 10154 (PAE)
Reporter
2022 U.S. Dist. LEXIS 230852 *; 2022 WL 17851810
FOCUS PRODUCTS GROUP INTERNATIONAL, LLC,
ZAHNER DESIGN GROUP LTD., HOOKLESS
SYSTEMS OF NORTH AMERICA, INC., SURE FIT
HOME PRODUCTS, LLC, SURE FIT HOME DÉCOR
HOLDINGS CORP., and SF HOME DÉCOR, LLC,
Plaintiffs, -v- KARTRI SALES CO., INC., and MARQUIS
MILLS INTERNATIONAL, INC., Defendants.
Prior History: Focus Prods. Grp. Int’l, LLC v. Kartri
Sales Co., 2018 U.S. Dist. LEXIS 134661, 2018 WL
3773986 (S.D.N.Y., Aug. 9, 2018)
Core Terms
infringement, products, patent, trade dress,
HOOKLESS, shower curtain, curtain, sales, plaintiffs’,
royalty, trademark, Hang, rings, hospitality, Licensed,
defendants’, customers, damages, marks, lost profits,
factors, license agreement, parties, disgorgement,
secondary meaning, consumer, registered, calculate,
intellectual property, manufacturing
Counsel: [*1] For Focus Products Group International,
LLC, Zahner Design Group, Ltd., Hookless Systems of
North America, Inc., Plaintiffs: Lee A. Goldberg, Limor
Wigder, Morris E. Cohen, Goldberg Cohen LLP, New
York, NY.
For Sure Fit Home Products, LLC, Sure Fit Home Decor
Holdings Corp., SF Home Decor, LLC, Plaintiffs: Lee A.
Goldberg, Morris E. Cohen, Goldberg Cohen LLP, New
York, NY.
For Kartri Sales Company, Inc., Defendant: Bernhard
Percival Molldrem, Jr., Law Office of Bernhard
Molldrem, Syracuse, NY.
For Marquis Mills, International, Inc., Defendant: Donald
J. Cox, Jr., LEAD ATTORNEY, PRO HAC VICE, Law
Offices of Donald Cox LLC, Princeton, NJ.
For Kartri Sales Company, Inc, Kartri Sales Company,
Inc., ThirdParty Plaintiffs: Bernhard Percival Molldrem,
Jr., Law Office of Bernhard Molldrem, Syracuse, NY.
For Kartri Sales Company, Inc., Counter Claimant:
Bernhard Percival Molldrem, Jr., Law Office of Bernhard
Molldrem, Syracuse, NY.
For Focus Products Group International, LLC, Hookless
Systems of North America, Inc., Zahner Design Group,
Ltd., Focus Products Group International, LLC,
Hookless Systems of North America, Inc., Zahner
Design Group, Ltd., SF Home Decor, LLC, Sure Fit
Home Decor Holdings [*2] Corp., Sure Fit Home
Products, LLC, SF Home Decor, LLC, Sure Fit Home
Decor Holdings Corp., Sure Fit Home Products, LLC,
Counter Defendants: Morris E. Cohen, Goldberg Cohen
LLP, New York, NY.
For Marquis Mills, International, Inc., Marquis Mills,
International, Inc., Counter Claimants: Donald J. Cox,
Jr., LEAD ATTORNEY, PRO HAC VICE, Law Offices of
Donald Cox LLC, Princeton, NJ.
For Kartri Sales Company, Inc., Counter Defendant:
Angela Foster, Law Office of Angela Foster, N.
Brunswick, NJ; Bernhard Percival Molldrem, Jr., Law
Office of Bernhard Molldrem, Syracuse, NY.
For Focus Products Group International, LLC, Hookless
Systems of North America, Inc., Zahner Design Group,
Ltd., Focus Products Group International, LLC,
Hookless Systems of North America, Inc., Zahner
Design Group, Ltd., Counter Defendants: Limor Wigder,
Morris E. Cohen, Morris E. Cohen, Goldberg Cohen
LLP, New York, NY.
Judges: PAUL A. ENGELMAYER, United States
District Judge.
Opinion by: PAUL A. ENGELMAYER
Page 3 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
Opinion
OPINION & ORDER
received direct testimony by affidavit, followed by live
cross and redirect examination.2 As to nine, [*4] the
Court heard testimony in wholly live form.3 The Court
also received testimony, in the form of deposition
excerpts, from five witnesses,4 and received hundreds of
exhibits.5
PAUL A. ENGELMAYER, District Judge:
This decision sets out the Court’s findings of fact and
conclusions of law pursuant to Federal Rule of Civil
Procedure 52 following a six-day bench trial in this case.
Plaintiffs manufacture, sell, and distribute shower
curtains [*3] with hookless rings that are coplanar with
the curtain. These products have obtained considerable
acclaim and commercial traction within the hospitality
industry, insofar as they enable shower curtains to be put
up more quickly and easily than conventional shower
curtains that attach by means of hooks. Plaintiffs claim
that defendants have manufactured, sold, and distributed
confusingly similar shower curtains, and thus have
infringed plaintiffs’ utility and design patents, infringed
plaintiffs’ trademarks and trade dress, and engaged in
unfair competition under the Lanham Act and New York
law. Plaintiffs further claim that defendants’ infringements
were willful, warranting enhanced damages. Defendants
deny these claims and advance a host of affirmative
defenses.
During lengthy pretrial litigation, the Court conducted a
Markman hearing, resolved many pretrial motions, and
entered summary judgment for plaintiffs on their utility
patent infringement claims. Trial was held on June 27-29
and July 26-28, 2022. The Court received testimony from
14 witnesses. As to six, called by plaintiffs,1 the Court
1 The Court here lists witnesses by the party who presented
their direct testimony. A number of witnesses appeared on both
sides’ witness lists, but, at the Court’s direction for economy’s
sake, testified on only one party’s case, with unrestricted crossexamination.
2 These were: Stacy Dubinski, Ryan Erickson, David Kreilein,
Charles Kuehne, David Zahner, and Adrian Whipple. Their
affidavits are filed at Dkts. 455-2 (“Dubinski Aff.”); 455-1
(“Erickson Aff.”); 455-3 (“Kreilein Aff.”); 455-4 (“Kuehne Aff.”);
473-1 (“Zahner Aff.”); and 473-2 (“Whipple Aff.”).
3 These
were: Robert Burbank, Sandra Kemp, and John
Elmore, called by plaintiffs; and Samantha Dolph, Karen
Goskowski, Patricia Kubus, David Middleberg, Joseph Ranieri,
and Graham Rogers, called by defendants.
4 For
plaintiffs, these were Goskowski, see Dkt. 455-6
(“Goskowski Dep. Tr.”); Kubus, see Dkt. 455-7 (“Kubus Dep.
The findings of fact that follow are based on the Court’s
review of the entire trial record. Where based in whole or
in part on a witness’s testimony, the Court’s findings
reflect credibility determinations based on the Court’s
assessment of, inter alia, the relevant witness or
witnesses’ experience, knowledge, and demeanor.
For the reasons that follow, the Court finds for plaintiffs
on all claims tried;6 dismisses defendants’ counterclaims
and affirmative defenses; awards plaintiffs lost profits and
reasonable royalty damages of $2,938,337, which
reflects the trebling of certain damages; and
commissions briefing on pre- and post-judgment interest
and attorneys’ fees.
I. Findings of Fact
A. The Parties and Other Relevant Entities
Plaintiff Focus Products Group International, LLC
(“Focus Products”) was a limited liability company
organized under the laws of, and with its principal place
of business in, Illinois. Kreilein Aff. ¶ 3; PTX 88. On
March 6, 2017, Focus changed its name to Sure Fit Home
Décor, [*5] LLC (“Sure Fit Home Décor”), also a plaintiff
here. Kreilein Aff. ¶ 6; PTX 88 at 3. Plaintiff Sure Fit Décor
Tr.”); Lawrence Mayer, see Dkt. 455-5 (“Mayer Dep. Tr.”);
Middleberg, see Dkt. 455-8 (“Middleberg Dep. Tr.”); and
Ranieri, see Dkt. 455-9 (“Ranieri Dep. Tr.”). For defendants, this
was Mayer.
5 Citations herein to “PTX” refer to a plaintiff exhibit; “DTX” to a
defendant exhibit; “Tr.” to the trial transcript; and “Dep,” to
deposition designations of the person indicated. The Court has
reviewed the parties’ most recent proposed findings of fact and
conclusions of law, see Dkts. 494, 500; exhibits; and pertinent
letters, see Dkts. 454, 475, 480, 481. Unless otherwise
indicated, where the Court cites testimony here, it has credited
that testimony.
6 Plaintiffs’ design patent infringement claim was not tried. As
explained below, the parties agreed to stay litigation on that
claim pending the outcome of a reexamination of that patent’s
validity by the United States Patent and Trademark Office
(“PTO”).
Page 4 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
Holdings Corp. (“SFD Holdings”) is a Delaware
corporation with a principal place of business in New
York City. Kreilein Aff. ¶ 10. Plaintiff SF Home Décor LLC
(“SF Home Decor”) is a subsidiary of SFD Holdings and
a Delaware limited liability company with its principal
place of business in Pennsylvania. Id. ¶ 9. Plaintiff Sure
Fit Home Products, LLC (“SF Home Products”) is a
subsidiary of SF Home Décor and a Delaware limited
liability company with a principal place of business in
Pennsylvania. See PTX 416. Non-party Hollander Sleep
Products acquired the Sure Fit entities in 2021. See Dkt.
494 at 3. However, the Sure Fit entities continue to exist.
Id.
Plaintiffs Zahner Design Group, Ltd. (“ZDG”) and
Hookless Systems of North America (“HSNA”) are
affiliated New York corporations each with a principal
place of business in New York. Dkt. 323 (“JPTO”) at 12.
Non-party David Zahner, who invented the hookless
shower rings forming the basis of this intellectual
property dispute, wholly owns ZDG and HSNA.7Id.
Non-party Arcs and Angles, Inc. (“A&A Inc.”) was a
corporation registered and [*6] with its principal place of
business in New York.8 Non-party Arcs & Angles, LLC
(“A&A LLC”) was a limited liability company. On July 9,
2004, HSNA exclusively licensed its rights in the
hookless shower ring patents to A&A Inc. PTX 387 at 114. On December 22, 2010, A&A Inc. assigned those
rights to A&A LLC. Id. at 23-24. On October 10, 2012,
Focus acquired A&A LLC and its intellectual property
rights. Id. at 28-29; see also Dkt. 297 at 3 (“SJ Op.”).
Defendant Kartri Sales Company, Inc. (“Kartri”) is a
Pennsylvania corporation with its principal place of
business in Forest City, Pennsylvania. JPTO at 12; Tr.
at 626.
Defendant Marquis Mills International, Inc. (“Marquis”)
was a New Jersey corporation with its principal place of
business in New Jersey that went out of business in
2020. JPTO at 12; Tr. at 576. Marquis manufactured and
sold the accused shower curtains to Kartri, which sold
7 The Court will refer to all plaintiffs collectively as “plaintiffs,” to
Focus Products and all its successor entities by the shorthand
“Focus,” and to all the Sure Fit entities as “Sure Fit.”
8 See Arcs & Angles, Inc. v. Carnation Home Fashions, Inc., No.
09 Civ. 1467 (JPO) (FM) (S.D.N.Y. Feb. 18, 2009), Dkt. 1 ¶ 1.
9 The Court found plaintiffs’ witnesses consistently credible and
relevant. The Court found the testimony of Kemp, who between
2008 and 2020 occupied a series of positions germane to this
these to resellers, mostly in the hospitality market.
Middleberg Dep. Tr. at 96; Kubus Dep. Tr. at 14-15.
Non-party Carnation Home Fashions, Inc. (“Carnation”)
once owned the EZ-ON Mark pertinent to the trademark
infringement claims here.
Non-party Star Linen, Inc. (“Star Linen”) is a company
that resells [*7] Kartri’s products to the hospitality and
healthcare industries. Tr. at 549. Middleberg worked in
acquisitions for both Marquis and Star Linen. Id.
Non-party Ramtex is a manufacturer of hospitality
products based in Shaoxing, China. It assisted Marquis
in manufacturing the accused shower curtains.
Middleberg Dep. Tr. at 46-47. Non-party Pong Hsu
(“Pong”) is an individual employed by Ramtex in 2012
and 2013. Id. at 58. Pong had formerly worked for
Waytex, a manufacturer that supplied the HOOKLESS®
product to Focus and its predecessor A&A LLC. Pong
had been a “part of [Focus’s] product development team
and .. . manufacturing team.” Tr. at 554.
B. Witnesses
Plaintiffs’ witnesses were Burbank, Sure Fit’s CEO;
Dubinski, who from 2018 to May 2022 held leadership
roles in marketing and branding for Sure Fit Home Décor
and Hollander Sleep; Erickson, Sure Fit’s vice president
of mass-market retail sales; Kemp, Focus’s former senior
vice president of hospitality; Kreilein, Focus’s former
executive vice president; Kuehne, Focus’s former CFO;
Whipple, Sure Fit’s CFO; Zahner; and Elmore, a
damages expert.
Defendants’ witnesses were Dolph, Kartri’s sales
operations
manager;
Goskowski,
Kartri’s
coowner [*8] and president; Kubus, Kartri’s co-owner and
president of sales and marketing; Mayer, Carnation’s
former owner; Middleberg, Marquis’s director of global
operations and president of Star Linen; Ranieri, Marquis’s
owner; and Rogers, a damages expert.9
controversy, particularly illuminating and has drawn on it
heavily. In 2008, Kemp was Focus’s director of operations,
overseeing the retail and hospitality distribution channels, and
a member of the team that acquired Arcs & Angles Inc., which
then held the intellectual property at issue. Tr. at 212-14, In
late 2010 or January 2011, Kemp took charge of Focus’s
hospitality business. Id. at 214. From then until her 2020
retirement, Kemp served, sequentially, as vice president, senior
vice president, and general manager of Focus and its successor
entities.
Page 5 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
C. The Intellectual Property in Dispute
1. The Patents
ZDG owns the four patents at issue—one design patent
and three utility patents. Zahner Aff. ¶¶ 2-3.
The first is Design Patent No. D746,078, entitled
“Shower Curtain” (the “‘078 Patent” or “Design Patent”).
It covers the design of the shower curtain ring that is
worked into the shower curtain at the curtain’s upper
edge. It looks like this:
shower curtain ring, and that “projecting edge . .. [is]
provided next to said slit,” Dkt. 148-3 at 15; and the ‘088
Patent similarly claimed “a projecting edge, said
projecting edge being an edge which projects from [the]
outer circumference of the shower curtain ring, Dkt. 1484 at 15. ZDG has exclusively licensed each of these
patents to Focus Products and Sure Fit through its
affiliate HSNA. See PTX 89; Kreilein Aff. ¶ 4. Sure Fit
sells shower curtains incorporating the patented
inventions in the hospitality industry throughout the
United States.
In its summary judgment decision on April 16, 2020,
the [*10] Court held that defendants had infringed
plaintiffs’ three utility patents. See SJ Op.
2. The EZ-ON Trademark and HOOKLESS®
Trademark
The second patent is Utility Patent No. 6,494,248,
entitled “Suspended Materials Having External Slits,” (the
“‘248 Patent”). PTX 3 at 1. The ‘248 Patent’s abstract
describes it as “openings each having a slit therein for
attachment to a fixed rod,… reinforced with rings having
projecting flanges .. . [which] make[] it easier to open up
the ring” and thus “facilitate the placement of [a shower]
curtain upon the fixed rod.” Id. It looks like this:
(anh)
See id. at 5.
The third and fourth patents are Utility Patent Nos.
7,296,609, entitled “Hanging Products” (the ‘”609
Patent”), PTX 4 at 1, and 8,235,088, entitled “Hanging
Products,” [*9] (the ‘”088 Patent”), PTX 5 at 1. The
abstracts for these patents describe them as “[h]anging
products” with “an opening for suspending the item from
a rod,” where each opening is strengthened “with a ring
having a gap,” and the ring contains “a movable member
for opening and closing the gap.” PTX 4 at 1; PTX 5 at 1.
Relevant here, the ‘248 Patent claimed an
“approximately horizontal component,” that is, a slit,
when the shower curtain “is hanging from the rod,” Dkt
148-2 at 13; the ‘609 Patent claimed a ring that included
“a projecting edge, said projecting edge being an edge
which projects from [the] outer circumference of the
10 The Court will refer to the EZ-ON Mark as “EZ-ON,” not “EZ-
The design patent and utility patents are incorporated
into shower curtains and sold under the HOOKLESS®
Trademark (“Hookless Mark”) and the EZ-ON Trademark
(“EZ-ON Mark”) (collectively, the “Marks”). The
HOOKLESS® Mark is registered with the PTO. It was
registered to its inventor Zahner’s company ZDG, initially
under U.S. Trademark Registration number 2,355,554
(Principal Register), and then under the numbers
2,381,995 (Supplemental Register) and 4,127,283
(Principal Register). See PTXs 84, 86, 520. The EZ-ON
Mark was not registered with the PTO as of the date this
suit was filed. On September 26, 2017—within
defendants’ challenged conduct—it was registered to
ZDG on the Principal Register under U.S, Trademark
Registration number 5,296,144.10 PTX 113.
Plaintiffs’ HOOKLESS® product, as sold in curtains,
looks like this:
Plaintiffs’ EZ-ON product, sold by Carnation pursuant to
a sublicensing agreement with Focus, looks like this:
ON®.”
Page 6 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
upper edge and partially jutting out above the edge,
Erickson Aff. ¶ 31, and looks like this:
PTX 270 excerpt (EZ-ON shower curtain product, as sold
by Carnation).
3. Plaintiffs’ Trade Dress
Plaintiffs claim that they have trade [*11] dress rights in
the overall appearance of shower curtains sold under the
HOOKLESS® and EZ-ON brands (the “Trade Dress”).
Plaintiffs circumscribe the scope of their claimed trade
dress by four factors:
(1) a shower curtain wherein the curtain lacks any
hooks protruding above the upper edge of the
curtain, so that Plaintiffs’ shower curtain provides the
visual appearance of an essentially “neat” and
“orderly” upper edge;
(2) and wherein the shower curtain has a row of rings
along the upper portion of the shower curtain, those
rings being attached to the material of the shower
curtain such that the bottom surface of each ring (on
one or both sides of the shower curtain) is essentially
coplanar with the material of the shower curtain, also
providing an essentially “neat” and “orderly”
appearance;
(3) wherein each ring includes a slit or gap in the
ring;
(4) and wherein the shower curtain’s rings or pairs of
rings, and the associated slits or gaps, are each fixed
in place on the shower curtain and provide an
organized and symmetrical repeating visual pattern
along the top width of the shower curtain.
Dkt. 148 ¶¶ 104-105; see also Erickson Aff. ¶ 28 (quoting
same).
The claimed Trade Dress, plaintiffs [*12] clarified at trial,
does not reach all shower curtains that do not contain
hooks above their upper edge. It does not, for example,
reach the Zenna Home Quik Hang Peva shower curtain,
which contains rings partially embedded in the curtain’s
Partial screenshot of Dkt. 303-7. The protruding rings,
plaintiffs explain, put the Zenna design outside of the first
element of plaintiffs’ Trade Dress—”lack[ing] any hooks
protruding above the upper edge of the curtain.” Erickson
Aff. ¶ 34.
Similarly, plaintiffs disavow that their claimed Trade
Dress covers products by Croydex, which include hooks
preinstalled on the shower curtain to facilitate the
installation of the shower curtain. Id. ¶ 36, Also outside
the parameters of the claimed Trade Dress is a shower
curtain named “InterDesign” that, lacking hooks, is
affixed to the shower rod by buckles that hang from the
rod and snap onto the shower curtain below. See PTX
132; see also PTX 131 (Brown design, similar). So, too,
are a Pierce product that uses clips that protrude above
the curtain’s upper edge, see PTX 133; a Fields design
that functions like a [*13] pull-down window shade and
does not rely on hooks or rings, see PTX 129; and a
Giumarra hookless spiral-notebook-like design in which
rings, perpendicular to the curtain’s surface and
protruding above its edge, are threaded onto the rod, see
PTX 130, Plaintiffs state that their Trade Dress does not
constrain those non-hooked shower curtain designs,
which have been sold commercially by Focus’s
competitors.11
As Erickson testified, plaintiffs’ claimed Trade Dress
leaves room for various forms of shower curtain designs
that enable easier installation than installing hooks. Tr. at
176 (“Croydex and Zenna have pre-installed rings, . . or
a mechanism to suspend or hang or put that shower
curtain on the shower curtain rod.”).12
4. Defendants’ Accused Ezy Hang Product
11 The Zenna design has been commercialized by Maytex Mills,
12 Some of Zahner’s own designs fall outside Focus’s claimed
Erickson Aff. ¶ 33. The Croydex design has been
commercialized by QK Supplies in the United Kingdom, id. ¶
37.
Trade Dress. For example, Figures 15, 16, and 17 of the ‘248
Patent protrude above the curtain’s upper edge. See PTX 134.
Page 7 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
The product accused of infringement here is the shower
curtain ring and corresponding curtains defendants have
manufactured and sold under the unregistered “Ezy
Hang” mark. Marquis manufactures and sells the
accused curtain to Kartri. Kartri brands the accused
curtains as “Ezy Hang” and resells them to distributors
and end users in the hospitality market. The accused
products look like this:
manufacture more individualized headers—the top part
of the curtain containing the rings. See id. at 642-43. Until
the challenged conduct began, Marquis and Kartri
manufactured and sold traditional, hooked shower
curtains. They then sought to compete with Focus’s
HOOKLESS® product in the hospitality [*15] market,
which had significantly shifted the hospitality market “in
the direction of hook-free curtains,” id. at 660, and in
which Focus had established a dominant market share,
see, e.g., id. at 472,511,743. This set the stage for the
parties’ commercial—and now legal—battle.
E. Plaintiffs’ Claims, Defendants’ Counterclaims,
and Rulings Narrowing the Issues to Be Tried
PTX 26, Kartri’s Accused Product No. [*14] I (excerpt of
image).
PTX 27 Karti’s Accused Product No. 2 (excerpt of image).
D. Kartri’s and Marquis’s Businesses and
Relationship
Kartri was founded in 1975 and incorporated in 1979. Tr.
at 626-28. It is operated by—and its name is derived from
the first names of—Karen Goskowski and Patricia
(“Trish”) Kubus, sisters who in 2005 took over Kartri from
their father. Id. at 630,633-34. Kartri manufactures the
Ezy Hang product in its facility in Forest City,
Pennsylvania, and through a contractor in Mexico and
stores that supply in an Arizona warehouse. Id. at 65657.
Marquis is an importer and supplies to Kartri. PTX 297
(“Elmore Rep.”) ¶ 31. The two entities had a longstanding
business relationship predating the challenged conduct.
See Tr. at 551. Marquis sources its products, inter alia,
from Ramtex in China. Id. at 589. Marquis provided fully
finished curtains to Kartri. Id. at 712. Kartri would
13 The Court also granted summary judgment for plaintiffs on (1)
Plaintiffs’ claims are in five categories: (1) against both
defendants, for infringement of plaintiffs’ utility and design
patents under 35 U.S.C. §§ 101 et seq.; (2) against both
defendants, for infringement of and unfair competition
with plaintiffs’ EZ-ON Trademark and trade dress under
15 U.S.C. § 1125(a); (3) against Kafiri, for infringement of
and unfair competition with plaintiffs’ HOOKLESS® Mark
under 15 U.S.C. § 1125(a); (4) against both defendants,
for unfair competition with plaintiffs’ EZ-ON Mark and
Trade Dress under New York law; and (5) against Kartri,
for unfair competition with plaintiffs’ HOOKLESS® Mark
under New York law. Plaintiffs seek damages on the
patent infringement claims and all infringement and
unfair competition claims as they relate to the EZ-ON
Mark and the Trade Dress, but not on the infringement
claims relating to the HOOKLESS® Mark. Plaintiffs
seek [*16] injunctive relief on their Lanham Act and
unfair competition claims, attorneys’ fees, and pre- and
post-judgment interest.
Defendants have raised affirmative defenses of lack of
statutory standing, failure to join an indispensable party,
non-infringement of plaintiffs’ EZ-ON Mark, invalidity of
plaintiffs’ EZ-ON Mark, non-infringement of plaintiffs’
trade dress, and invalidity of plaintiffs’ trade dress.
Rulings on summary judgment and on motions in limine
pruned the issues to be tried:
• In an April 16, 2020 decision, the Court granted
summary judgment to plaintiffs on the claim that
defendants infringed the utility patents (‘248, ‘609,
and ‘088), leaving unresolved whether the
infringements were willful. See Dkts. 297 at 31;
312.13
Kartri’s first counterclaim alleging tortious interference and
monopolization; (2) Marquis’s first counterclaim alleging non-
Page 8 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
• The parties later agreed to stay plaintiffs’ claim that
defendants infringed the fourth, design patent
(‘078)—and with it, Marquis’s first counterclaim
alleging non-infringement of that patent, and
seventh counterclaim alleging the ‘078 patent’s
invalidity—in light of reexamination proceedings
initiated by Kartri at the PTO as to that patent. See
PF at 4, 7-8.
• In a January 4, 2021 decision, the Court ruled that
plaintiffs’ trade dress is non functional, see Dkt. 312
at 7-8, thereby [*17] establishing that element of
plaintiffs’ trade dress infringement claim.14
Accordingly, the following claims were left for resolution
at trial:
• On plaintiffs’ claims that both defendants infringed
the EZ-ON Trademark under the Lanham Act and
engaged in unfair competition with that Mark under
the Lanham Act and New York state law, the issues
of liability, damages, and injunctive relief;
• On plaintiffs’ claim that Kartri infringed the
HOOKLESS® Mark under the Lanham Act and
engaged in unfair competition with that Mark under
the Lanham Act and New York state law, the issues
of liability and injunctive relief;
• On plaintiffs’ claim that defendants infringed
plaintiffs’ trade dress under the Lanham Act and
engaged in unfair competition under the Lanham Act
and New York state law, the issues of liability,
damages, and injunctive relief;
• On defendants’ infringement of the ‘248, ‘609, and
‘088 patents, the issue whether defendants’
infringement was willful, and the tabulation of
damages; and
• On all claims, the issue of reasonable attorneys’
fees, to be briefed and decided in post-trial
proceedings.
infringement of the utility patents; (3) Marquis’s fourth
counterclaim alleging invalidity of the ‘248 patent; (4) Marquis’s
fifth counterclaim alleging invalidity of the ‘609 patent; (5)
Marquis’s sixth counterclaim alleging invalidity of the ‘088
patent; (6) Marquis’s eighth counterclaim alleging patent
misuse; and (7) Marquis’s tenth counterclaim alleging the
invalidity of the HOOKLESS® trademark. See Dkt. 297 at 32.
14 On May 14, 2021, the Court dismissed defendants’ affirmative
defense that plaintiffs lack patent standing. Dkt. 365. And on
August 5 and November 23, 2021, in bench rulings resolving
The following defenses and counterclaims were also left
for resolution at trial:
• The defense that plaintiffs lack standing to bring
its [*18] claim that defendants infringed the EZ-ON
Mark, in light of non-party Carnation’s alleged
ownership of the intellectual property at issue here,
and the related defense that plaintiffs failed to join
Carnation as an indispensable party;
• Marquis’s ninth counterclaim alleging invalidity of
the EZ-ON Mark;
• Marquis’s second counterclaim alleging noninfringement of the EZ-ON Mark;
• Marquis’s eleventh counterclaim alleging invalidity
of plaintiffs’ Trade Dress; and
• Marquis’s second counterclaim alleging noninfringement of plaintiffs’ Trade Dress.
F. History, Ownership, and Licensing of the
Intellectual Property at Issue
1. 1992-1997: Zahner’s Invention, the ‘232 Patent,
Early Commercialization Efforts, and “GameChangtingl” Success
In or about 1992, Zahner conceived of inventing a
hookless shower curtain ring. Zahner Aff. ¶¶ 5-6, 68; see
also id. ¶ 69 (“I began experimenting with various shower
curtain designs. My goal was to create a design that was
both easy to install and aesthetically attractive.”).
Developing the invention involved manual labor,
experimentation with rudimentary materials, and
refinements by trial and error. Id. ¶¶ 70-72. On May 18,
1992, Zahner filed an application to patent [*19] his
invention with the PTO. PTX 303. On February 16, 1993,
the PTO granted the application, under the original ‘232
Patent. Id.
For three or four years, Zahner attempted to
commercialize his invention by meeting with investors
motions in limine, the Court precluded as abandoned or
forfeited, these affirmative defenses: (1) nominative fair use and
descriptive fair use of plaintiffs’ trademarks; (2) equitable
estoppel and unclean hands; and (3) all other affirmative
defenses not timely raised. See Dkts. 412, 436. The parties
have dismissed, on consent, Marquis’s third counterclaim
alleging patent invalidity for alleged lack of inventorship, and its
second counterclaim alleging the non-infringement of the
HOOKLESS® trademark. See Dkt. 297 at 31; PF at 7; Dkt. 412
(bench ruling resolving plaintiffs’ motions in limine); 436 (bench
ruling resolving defendants’ motions in limine).
Page 9 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
and manufacturers. Those efforts failed. Zahner Aff. ¶¶
77-82. In June 1996, Zahner joined forces with John
Benis and Teddy Marcus to form HSNA. Id. ¶¶ 83-84.
Benis supplied capital; Marcus was HSNA’s marketing
and sales expert. Id. ¶ 85. As of that time, Zahner
testified, the idea of a curtain that attached without hooks
was novel: “[N]o one had ever seen anything like that
before. . . It [had been] just, you know, shower curtains
with hooks.” Tr. at 121. By 1997, that three-person team,
operating as HSNA, was seeking to market Zahner’s
hookless shower curtain technology. Zahner Aff. ¶¶ 8688.
At some time between 1997 and 1999, Marcus pitched
Zahner’s technology to Kartri. Id. ¶ 89; Tr. at 724-25.
Then a small company, Kartri declined. Zahner Aff. ¶ 91;
Tr. at 725-26. After approximately a year of refining and
pitching the product, and having spent $250,000 in
research and development, Zahner Aff. ¶¶ 94, 99, HSNA
made its first sale to Gracious Home, a retail store in
New [*20] York City, id. ¶ 103.
Zahner’s product soon swept the hospitality market, until
then dominated by traditional hooked curtains. Focus’s
Dubinski termed it “revolutionary” and “a game changer.”
Dubinski Aff. ¶ 12. The design was “innovative,” neat, and
“unique,” id. ¶¶ 12, 20; it saved hospitality providers
installation time and reduced workers’ compensation
claims from injuries sustained installing hooked curtains,
which required effort and balance. Kartri’s Kubus
acknowledged that HOOKLESS® was “known in the
industry . . . [I]t saves the housekeeper time and money
to put this product up. It’s just known. [Zahner has] done
really well in that marketing direction.” Kubus Dep. Tr. at
52-53.
The Court found illuminating two videos of live
demonstrations of the HOOKLESS® products’ ease of
installation. These showed ZDG’s Marcus installing the
HOOKLESS® curtain on the telemarketing channel QVC.
In each, Marcus snaps into place, with ease and in about
10 seconds, a HOOKLESS® curtain on a rod. See PTXs
471, 472 (video exhibits). The symmetric placement of
the curtain’s slits—connecting pairs of adjacent rings—
ensured that the curtain billowed uniformly across the
curtain rod. As installed, the [*21] curtain had a “neat”
appearance consistent with plaintiffs’ claimed trade
dress. The video demonstrations made apparent the
efficacy of the HOOKLESS® product relative to
conventional shower curtains, and its appeal to hotel and
15 ZDG
has entered into license agreements with other
companies that are not at issue here. See, e.g., Tr. at 124
motel chains that must install and remove shower
curtains in bulk daily.
2. The HSNA-A&A License Agreement and Its Chain
of Transfers
On March 2, 1999, ZDG licensed all of its patent,
trademark, and trade dress rights (the “Intellectual
Property Rights”) to HSNA. DTX 89.
On June 6, 2000, ZDG registered the Hookless Mark with
the PTO, turning HSNA’s common law rights in the
previously unregistered Hooldess Mark into the rights
under the Lanham Act accorded to a registered
trademark. PTX 84. On May 31, 2004, HSNA licensed its
intellectual property rights to Arcs and Angles, Inc. PTX
387 (“HSNA-A&A License Agreement”) at 1; Zahner Aff.
¶ 337. On May 16, 2008, Arcs & Angles, Inc. was
acquired by Arcs & Angles Holdings, LLC, which owned
Focus. PTX 268; Zahner Aff. ¶¶ 345-346, Tr. at 214.
Kemp, Focus’s then-director of operations, id. at 212-13,
testified that Arcs & Angles Holding, LLC acquired “all the
assets, the inventory, open receivable records,
everything,” id. at 214. [*22] Focus thus controlled Arcs
& Angles Holdings, LLC, Arcs & Angles, Inc., and the
Intellectual Property Rights associated with Zahner’s
invention.
On December 14, 2010, Focus transferred the
Intellectual Property Rights to Arcs & Angles, LLC. PTX
387 at 23-24. Zahner executed the amendment to the
HSNA-A&A License Agreement on HSNA’s behalf. Id.;
Zahner Aff. ¶¶ 347-348. On October 10, 2012, Focus
transferred the Intellectual Property rights to itself, that
is, Focus Products Group International LLC. PTX 387 at
28-29; Zahner Aff. ¶¶ 350-351. This amendment to the
HSNA-A&A License Agreement was executed by
Zahner. PTX 387 at 29; Zahner Aff. ¶ 352; Kreilein Aff. ¶
4.
On March 6, 2017, Focus was renamed Sure Fit Home
Decor LLC. PTX 88 at 3; Kreilein Aff. ¶¶ 5-6. On July 13,
2017, Sure Fit Home Decor sold its license in the
Intellectual Property Rights to SF Home Decor LLC.
PTX 89; Kreilein Aff. ¶¶ 8-9. There were no further
transfers of the Hookless Trademark and the Trade
Dress or relevant licensing agreements.15
(Zahner, testifying about license agreement with On The Right
Track).
Page 10 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
3. The EZ-ON Trademark, Plaintiffs’ Dispute with
Carnation, and the Carnation Licensing Agreement
The parties dispute whether the unregistered EZ-ON
Mark was among the Intellectual [*23] Property Rights
subject to the series of transfers above. The history of
that mark is complicated, on the one hand, by a course
of dealings between ZDG and A&A, and on the other,
third party Carnation, which had originally owned and
used that then-unregistered mark. The Court here sets
out the facts bearing on the ownership of the EZ-ON
Mark. These are context for the Court’s finding, infra, that,
by the time Kartri’s sales of the accused products began
in 2013, plaintiffs, not Carnation, owned the EZ-ON Mark.
The EZ-ON Mark was undisputedly originally used and
commercialized by Carnation. Until 2008, ZDG and A&A
had produced hookless shower curtains under their
FLEX-ON Trademark, registered with the PTO under the
number 2,948,547 (the “FLEX-ON Mark”). See PTX 532.
Carnation’s owner and president, Lawrence Mayer,
testified that Carnation had sold hookless shower curtain
products under the unregistered EZ-ON Mark since 2009.
Mayer Dep. Tr. at 15, 33. In fact, a letter adduced in
discovery establishes that Carnation’s use of this mark
dated back to at least to 2008. See PTX 360. The letter,
dated December 16, 2008, is from counsel for ZDG and
A&A to Carnation. It challenges Carnation’s [*24] use of
the EZ-ON Mark. See id. ZDG and A&A there claimed
that Carnation’s sale of shower curtains under the EZ-ON
Mark imitated their FLEX-ON Mark, was likely to cause
consumer confusion between the two, and likely infringed
ZDG’s three utility patents. Id. The letter directed
Carnation to cease the alleged infringement. Id.
Carnation refused.
On February 18, 2009, ZDG and A&A filed suit against
Carnation in this District for patent infringement and
unfair competition. See Arcs & Angles, Inc, No. 09 Civ.
1467. On February 1, 2012, the parties resolved that
lawsuit via a settlement agreement, PTX 390, and a
separate licensing agreement, PTX 370 (“Carnation
Licensing Agreement”).
Salient here, the Carnation Licensing Agreement in § 4.1
granted Carnation a license to sell the shower curtains
that had given rise to the dispute; in § 4.2 granted A&A
a “sublicense” to Carnation to use intellectual property
associated with these products, including the EZ-ON
Trademark; and in § 5.3 required Carnation to assign any
newly conceived, commercialized, or registered
intellectual property not explicitly covered in §§ 1.6-1.9
to ZDG and HSNA. More fully, the Carnation Licensing
Agreement contained these provisions, among others:
Section 1.6 (definition [*25] of “Licensed
Products”): The ‘Licensed Products’ shall be
defined herein as shower curtains having integrated
rings of the form depicted in Appendix A. The term
Licensed Products shall also include any rings
having a substantially similar appearance to that
shown in Appendix A, namely, rings having a flat
upper edge, an opening for suspension of the
shower curtain on a shower rod, and a diagonal slit
for placement of the opening on the shower curtain
rod, wherein the slit extends from the inner
circumference of the opening to the outer
circumference of the opening, and wherein said
diagonal slit is within +/- 15 degrees from that shown
in Appendix A.
Appendix A looks like this:
Appendix A
PTX 370 at 13.
Section 1.7 (definition of “Licensed Patents”):
The ‘Licensed Patents’ shall be defined herein as all
patents and patent applications licensed by [Arcs &
Angles, LLC] from HSNA pertaining to the Licensed
Products that are issued, pending or filed in the
future [worldwide]. The Licensed Patents include,
but are not limited to, [patents ‘248, ‘609, and ‘402];
any
divisions,
reissues,
reexaminations,
continuations, continuations-in-part, extensions
thereof, and all foreign counterparts thereto.
Section 1.8 [*26] (definition of “Licensed
Trademarks”): The “Licensed Trademarks” shall
include U.S. Trademark Registration No. 2,381,995
for HOOKLESS®; U.S. Trademark Application No.
77/878,05 for HOOKLESS, and CTM Trademark
Registration No. 847,355 for HOOKLESS®.
Section 1.9 (definition of “Intellectual Property”):
The “Intellectual Property” shall be defined herein
defined as the Licensed Patents and the Licensed
Trademarks.
Section 4.1 (non-exclusive sublicense to
Carnation): [Arcs & Angles, LLC] hereby grants
Page 11 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
Carnation, upon and subject to all the terms and
conditions of this Agreement, a sub-license under
the Intellectual Property to make, have made on its
behalf, use, import, offer for sale, have offered for
sale on its behalf, sell, have sold on its behalf, and
export, the Licensed Products [worldwide] for the
Term of this Agreement. Such sublicense to
Carnation is non-exclusive with respect to ZDG’s
current licensees, namely, HSNA [and A&A LLC].
Section 4.2 (rights sublicensed to Carnation): As
part of said sublicense, [A&A LLC] hereby grants
sub-licensee the right to use the following trademark
on the Licensed Products: ‘EZ ON Shower Curtain’;
and also may use the phrase ‘with patented
HOOKLESS® [*27] technology’ in small print . . .
However, sub-licensee shall not use the trademark
HOOKLESS® as a brand name for the Licensed
Products.
Section 4.3: Carnation shall provide an example of
a pre-production proof or sample of any Licensed
Products, packaging, advertising, or other marketing
or promotional material to A&A [LLC] before
commercialization[.]
Section 4.4: This section restricts Carnation’s
sublicense to sell to retailers.
Section 4.5: This section prohibits Carnation from
sublicensing, transferring, or assigning its rights
under the Carnation License Agreement to another
party.
Section 5.3 (assignment of newly registered
intellectual property to ZDG): In the event that any
intellectual property falling within the scope of
Licensed Patents, Licensed Trademarks, or
Licensed Products is conceived, reduced to practice,
or developed, or a patent or trademark application is
filed for by sublicensee during the term of this
agreement, such additional intellectual property
shall be assigned to ZDG and deemed included
within the scope of the present agreement.
PTX 370. By the time the Carnation Licensing Agreement
was executed on February 7, 2012, A&A Inc. had
assigned its intellectual property [*28] rights to A&A
LLC. On October 10, 2012, Focus acquired A&A LLC
and, with it, A&A LLC’s intellectual property rights under
the Carnation Licensing Agreement. See PTX 387 at 2829.
The parties dispute whether, upon execution of the
Carnation License Agreement in February 2012, A&A
(and soon thereafter Focus) or Carnation owned the EZON Trademark. Plaintiffs advance two arguments as to
why ownership rights in the EZ-ON Mark vested in them
from the moment the agreement was executed. First, §
4.2’s provision that Arcs & Angles, LLC “grant[ed] sublicensee [i.e., Carnation] the right to use” the Mark “EZ
ON Shower Curtain” and the phrase “with patented
HOOKLESS® technology” on the packaging of the EZON curtain supports the inference that Arcs & Angles
owned the EZ-ON Mark. That is because plaintiffs could
not grant a sublicense to Carnation in a mark that
plaintiffs did not own. Second, § 5.3 created an obligation
for Carnation to assign to ZDG any “intellectual
property” not captured by §§ 1.7 and 1.8 that was
“conceived, reduced to practice, or developed, or [on
which] a patent or trademark application is filed for by
[Carnation] during the term of [the Carnation Licensing
Agreement].” [*29] Insofar as the EZ-ON Mark, which
was not registered until Carnation received a registration
from the PTO on September 26, 2017, PTX 113, fell
outside the “Intellectual Property” defined in the
agreement as later registered, this was covered by § 5.3
and was assigned to ZDG pursuant to that provision.
Defendants counter with three arguments. First, they
note that Carnation—specifically its CEO Mayer—
subjectively continued to believe, after the agreement,
that it owned the EZ-ON Mark, both before and after its
registration in September 2017. Defendants ask that
Carnation’s understanding be credited. Second, they
argue that § 4.2 should be read not as a licensing by
plaintiffs to Carnation of the right to use the EZ-ON mark,
but as vesting ownership of those rights in Carnation.
And third, they assert, § 5.3 does not change this result,
because it does not include the EZ-ON Mark. The Court
resolves this dispute infra, in plaintiffs’ favor, in the
course of rejecting Marquis’s affirmative defense that
plaintiffs lack standing under the Lanham Act to pursue
the EZ-ON trademark infringement claim because they
purportedly did not own the EZON Mark.
In the years after the agreement, a disagreement
arose [*30] between Focus and Carnation as to who
owned the EZ-ON Mark. Focus, understanding the
agreement to vest ownership of the mark in A&A, upon
its acquisition by A&A began to sell shower curtains using
the EZ-ON Mark. Kreilein Aff. ¶ 14; Erickson Aff. ¶ 14.
Zahner, who signed the agreement, Tr. at 131, testified
at trial that he understood “that once this agreement was
executed, [ZDG] would own the rights to the EZ ON
shower curtain trademarks . . . and [ZDG] would license
it [to HSNA] Systems, and [HSNA] would license it back
Page 12 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
to Carnation,” id. at 126. Carnation, however, took a
different view, and on March 3, 2017, issued a ceaseand-desist letter to Focus objecting to Focus’s usage of
the EZ-ON Mark. DTX 127 (Carnation letter); Kreilein Aff.
¶ 15. Carnation proposed to consent to Focus’s usage if
Focus made payments to it. DTX 127; Kreilein Aff. ¶ 15.
In this litigation, Carnation’s president and owner, Mayer,
gave deposition testimony in November 2018, in which
he admitted he was “not sure” which entity owned the EZON Mark following execution of the Carnation Licensing
Agreement, Mayer Dep. Tr. at 31-32, but refused to
concede that plaintiffs owned it, see, e.g., id. at 111. From
his [*31]
perspective, the Carnation Licensing
Agreement had allowed Carnation “to get out of the
[protracted] lawsuit,” while “creat[ing] a little space that
would permit [Carnation] to sell the [EZ-ON] product.” Id.
at 31.
On September 29, 2021, Carnation and Focus’s
successor, Sure Fit, resolved their dispute over who
owned the EZ-ON Mark, executing an amendment to the
Carnation Licensing Agreement that assigned all rights to
the EZ-ON Mark to ZDG. On October 1, 2021, plaintiffs
filed a letter attaching that amendment, see Dkt. 414-1 at
14-15; see also PTX 113 (registration of EZ-ON
Trademark under number 5,296,144 with PTO to ZDG),
and Carnation recorded that assignment with the PTO.
Dkt. 414-2. This Court held that it would not consider the
September 2021 amendment as evidence as to who had
owned the EZ-ON Mark at the time of the Carnation
License Agreement, as the agreement was entered into
after discovery had closed. Tr. at 6-7.
G. Advertising, Promotion, and Recognition of
Plaintiffs’ Products
In 1997, HSNA began promoting Zahner’s shower curtain
products. On March 30, 1998, shortly after HSNA began
selling these through the retail store Gracious Home,
New York Magazine featured the products [*32] in its
“Best Bets” column. PTX 543 at 2. Zahner’s hookless
products gained national exposure on QVC, in a segment
for new products called “The Big Time.” Zahner Aff. ¶¶
109-110. In it, Zahner’s products competed with other
new products—and won. Id. ¶ 112. HSNA received
positive feedback from those appearances and
presented its Hookless products several more times on
the QVC segment “Today’s Special Value.” Id. ¶¶ 115118. In 2000, HSNA entered into a sales licensing
agreement with the home furnishing company CHF
Industries, Inc. PTX 368.
HSNA’s successors-in-interest A&A Inc., A&A LLC,
Focus Products, and Sure Fit, widely advertised their
shower curtains through various channels. From 2008
on, Focus “did television ads, print ad[]s, trade shows,
catalogs, websites, distributor buying guides, et cetera,”
Tr. at 217 (Kemp), plus physical flyers and website
banners, id. at 237; see also id. at 227.
Focus and its predecessors have also heavily advertised
their shower curtain products on TV. Between 1997 and
2005, HSNA promoted plaintiffs’ shower curtain products
on QVC. Between 2005 and 2009, Arcs & Angles ran 91
separate programs promoting those products on QVC.
See Tr. at 227; PTX 521 [*33] at 117 (listing TV
appearances). Sales followed: Kemp testified that the
Hooklesse product “broke records. . . . They ran through
the stock. . . . In fact, QVC continuously asked to air it
because the product did so well for them.” Tr. at 229.
Focus’s television marketing included the videos in which
Marcus quickly installed the product onto a shower
curtain rod, see Tr. at 228-30 (video demonstrated);
PTXs 471,472 (video exhibits), and advertisements that
began to appear around 2011, Tr. at 230; PTX 470.
Plaintiffs today continue to promote the products on QVC,
Tr. at 227 (Kemp); see also PTX 469,470 (video exhibits),
exposing the products to millions of viewers. Zahner Aff.
¶ 155.
In the retail market, A&A LLC promoted the
HOOKLESS® shower curtains for their “ease of
installation”; “ten second[]” installation time, PTX 547; the
absence of missing or broken rings, “draping perfectly
[and] sliding effortlessly,” PTXs 547, 552, 560; the
reduced “hassle” of changing shower curtains, PTX 548;
“install[ation] like magic in just seconds” with “no need to
remove the rod,” PTX 552; and lower maintenance costs
and increased safety, satisfaction, and morale among
hospitality and housekeeping [*34] staff, PTX 550, 559.
See also PTX 554 (reduced labor costs due to reduced
installation time), 561 (same), 562 (same), 549, 553, 555,
558. Focus, after acquiring A&A LLC’s intellectual
property rights, similarly touted the products as [s]imple
and dependable, . . . install[ing] in seconds, eliminat[ing]
snags, and draw[ing] perfect folds in the curtain.” PTX
121. By 2013, Focus asserted, its HOOKLESS® shower
curtain had been “a fixture in retail for a decade.” Id.
On the hospitality side of its business, Focus advertised
its shower curtains in annual catalogs, see PTXs 394
(2011 catalog), 393 (2012), 418 (2013), 419 (2014), 420
(2015); see also PTXs 474, 476, 480, 481, 545, 564.
HOOKLESS® products have been prominently displayed
in advertising catalogs by the American Hotel Register
Page 13 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
Company (“AHR”). Dubinski Aff. ¶ 17. That catalog
distributed between 200,000 and 250,000 copies a year
to hotel chains nationwide. Id. ¶¶ 17, 19. AHR was
Focus’s second-largest customer. Tr. at 237 (Kemp). Its
catalog ads were often financed with so-called rebates,
in which Focus subsidized a distributor’s advertising by
paying a lump sum or a share of sales toward the
advertising
cost.
Id.
at
140-41
(Dubinski). [*35] Percentages of sales could range
between 1% (for example, at Bed Bath & Beyond) to 10%
(for example, at Amazon). Tr. at 240 (Kemp). In 2013,
such rebates amounted to a total of approximately
$250,000 on the hospitality business side, and
approximately $200,000 on the retail business side. Id.
at 241. Between 2009 and 2013, Focus spent
approximately $1.2 million in rebates, covering both the
hospitality and retail arms of its business. Id.
in 2013, Focus’s total advertising budget for its hospitality
business exceeded $500,000. Id. at 246. Focus also
promoted its products via approximately “150 field reps”
who were trained at distributor trade shows. Id. at 248. In
its retail business, Focus also drew customers who had
been exposed to its HOOKLESS® products during their
stays at hotels. Id.
In 2013, HOOKLESS® curtains were hung in
approximately 2.5 million hotel rooms. Id. at 251. At an
average occupancy rate of 76% per hotel, and an
average length of stay of 2.5 to three days, that meant
“over 100 million individual exposures” per year. Id.
(Kemp). This had “enormous value” in increasing brand
awareness. Id. Focus received so many individual
consumer inquiries from hotel guests about [*36] its
curtains that it prepared a dialogue script for its customer
service team specific to such inquiries. Id. at 252.
Plaintiffs also promoted their products at trade shows.
Between 2005 and 2009, Arcs & Angles made 34 trade
show appearances. See PTX 521 at 117-18 (listing
appearances). These continued after Focus acquired
Arcs & Angles in 2009. See Tr. at 242-43, 245 (Kemp).
The trade shows promoted the products to retailers,
hospitality chains, and other distributors. Id. at 242.16
Before trade shows, Focus conducted short training
sessions with some vendors. Id. A&A LLC and Focus also
pitched their HOOKLESS® products at AHR’s sales
expos and gave rebates and advertising allowances to
16 See also Tr. at 244 (Kemp) (“[I]f it’s a retail industry show, it’s
going to be the retail buyers that are coming in, maybe some
designers. If it’s a hospitality industry show, it could be
designers, independents, boutiques, chains, hotel owners,
customers who agreed to promote the product. Dubinski
Aff. Tiff 15-16, 32. HOOKLES SO products dominated
attention at many trade shows, Tr. at 243; between 2008
and 2013, Focus promoted its HOOKLESS® products in
at least 15-20 trade shows per year, and thus in 60-100
during a five-year period. Id. at 243-44 (Kemp). In 2013,
Focus had an approximately $250,000 budget for trade
shows in the hospitality business and a separate budget
for retail-oriented trade shows, both of which increased
over time. Id. [*37] at 245-46.
Arcs & Angles and Focus also advertised their shower
curtain products on their websites. See PTXs 461, 566.
Plaintiffs’ distributors such as Guest Supply and True
North—have also advertised plaintiffs’ products. See
PTXs 462, 521 at 82.
Plaintiffs’ products have received favorable, unsolicited
media coverage. As mentioned, in 1998, New York
Magazine featured HSNA’s HOOKLESS® curtain in its
“Best Bets” section, calling the curtain “cutting-edge” in
sparing customers the effort of “contorting to attach ugly
hooks.” PTX 543 at 2. In September 2001, the American
Society of interior Designers’ magazine, Icon, featured
the “ingenious” HOOKLESS® curtain in an editorial. See
PTX 429. In 2009, Woman’s Day magazine featured
plaintiffs’ shower curtain as a product one has “gotta
have.” PTX 468 at 2. In 1997, after a multi-week
competition, QVC named plaintiffs’ shower curtain the
“Best New Product.” Zahner Aff. ¶ 183.
Plaintiffs also introduced evidence of the shower curtains’
favorable recognition in the hospitality industry, see, e.g.,
Dubinski Aff. ¶¶ 9, 12, 20, 28, unsolicited customer
testimonials for Hookless curtains, see, e.g., PTXs 438,
457 at 2, 467, and customers’ brand [*38] loyalty, see
Dubinski Aff. ¶ 55; Erickson Aff. ¶ 25. Kartri’s Kubus
acknowledged that plaintiffs’ HOOKLESS® shower
curtains “gained a lot of momentum” in the hospitality
market. Kubus Dep. Tr. at 26.
H. Plaintiffs’ Market Share and Revenues
By the time defendants were developing their accused
product in 2012, plaintiffs were the leading seller of
shower curtains in the hospitality market. See Tr. at 661
(Goskowski, conceding that Focus, by late 2012, had
decision makers, basically, as well as like, I said the chain
designers. And if it’s a chain show, it’s going to be the individual
brand hotels, the owners of the hotels and decision makers
coming.”).
Page 14 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
established dominant market share). Throughout
defendants’ accused conduct—October 2013 to
November 2018—plaintiffs’
market share was
approximately 50%. Elmore Rep. ¶ 80; Tr. at 512
(Elmore).
By 2005, plaintiffs’ curtains were used by more than 25
hotel and motel chains, and in more than one million hotel
or motel rooms across the United States. PTX 551;
Zahner Aff. ¶ 186. In 2007, these had grown to 39 hotel
and motel chains and more than two million rooms. These
chains included Hilton, Holiday Inn, Motel 6, and Red
Roof. PTX 563; Tr. at 521.
Between 2005 and September 2013, Focus sold more
than $150 million of Hookless shower curtains, with about
65% of these revenues coming from hospitality
customers
and
the
balance
from
retail
customers. [*39] Tr. at 252-53 (Kemp).17
Between 2013 and August 2017, Focus’s revenues for its
HOOKLESS® shower curtains exceeded $81 million in
the hospitality market: $14.7 million in 2013; $16.5 million
in 2014; $21.2 million in 2015; $16.9 million in 2016; and
$12.1 million in January through August 29, 2017. PTX
518; Elmore Rep. ¶ 98. These reflected sales of
approximately 5.76 million shower curtains. PTX 515.
During the same period, revenues for the HOOKLESS®
shower curtains in the retail market exceeded $54
million: $8.7 million in 2013; $11.4 million in 2014; $13
million in 2015; $12.5 million in 2016; and $8.9 million in
January through August 29, 2017. These reflected sales
of approximately 4.57 million shower curtains. PTX 514.
I. Plaintiffs’ Actions Against Alleged Infringers
Plaintiffs have taken various legal actions to defend the
intellectual property at issue here.
On September 25, 2007, Arcs & Angles filed a complaint
against Royal Pacific Corporation, claiming infringement
of its HOOKLESS® Mark and ‘248 patent. See PTX 99.
On December 6, 2007, that litigation ended in settlement
and Royal Pacific’s agreement to desist from its
challenged conduct. PTX 537. Plaintiffs brought similar
such challenges, [*40] with similar outcomes, against
Aim-Co., Inc., see PTXs 100 (complaint filed January 25,
17 Additional evidence of plaintiffs’ sales during that early period
comes from Arcs & Angles’s reported sales figures. Between
2005 and 2010, Arcs & Angles reported that sales for products
under the HOOKLESS® brand had reached a volume of $88
million. PTX 521 at 116; Zahner Aff. ¶ 189. Carnation
2008), 594 (settlement and agreement to desist executed
April 1, 2008); DFW Motel Supply & Textiles, Inc., see
PTXs 102 (complaint filed October 1, 2007), 350
(agreement to desist executed in October 2007); Neilmax
Industries, Inc., see PTXs 340 (complaint filed November
16, 2007), 117 (agreement to desist executed in January
2008); and Trend Supply, Inc., see PTXs 103 (complaint
filed April 15, 2010), 118 (agreement to desist executed
May 24, 2010). Plaintiffs also sent cease-and-desist
letters to alleged infringers, which ended in agreements
to desist. Recipients included: Courtesy Products, Inc.,
see PTX 381 (November 27, 2007 letter); Linens4Less
Inc., see PTXs 589 (June 16, 2009 letter), 590 (email
noticing desistance sent June 16, 2009); and Champion
Supply Co., Inc., see PTXs 585 (January 6, 2009 letter),
586 (letter noticing desistance; undated, but fax
watermark indicating receipt on January 8, 2009).
Through such measures, the Court finds, plaintiffs
maintained exclusive control over its hookless shower
curtains in the hospitality market between 1997, when
the trade dress was introduced, [*41] and 2013, when
defendants’ alleged infringement began. The above
entities either ceased the challenged conduct, or entered
into license agreements with plaintiffs.
J. Defendants’ Challenged Conduct
1. Late 2012—Early 2013: Pong Pitches Samples to
Marquis
Middleberg testified as follows. In late 2012 or early 2013,
he traveled to China to meet Pong Hsu of the Chinese
textile manufacturing company Ramtex. Tr. at 549-50.
Pong and Middleberg had known each other through
business dealings for more than 20 years. Id. at 548.
Middleberg usually purchased products from Ramtex
either on behalf of Star Linen, or on behalf of Marquis, to
resell those products in the United States. Id. at 549,
551.18
At this meeting, Yong showed Middleberg a sample of a
hook-free shower curtain with a “D-shaped grommet.” Id.
at 550. Pong represented that he had developed the idea
himself, that he had obtained a Chinese patent for it, and
independently reported more modest sales figures. Between
2009 and January 2013, Carnation has had a total sales volume
of $225,710. PTX 591.
18 Star
Linen and Marquis are owned and run by the same
person—Joseph Ranieri. Tr. at 550.
Page 15 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
that he was in the process of applying for a United States
patent. Id. at 553-54. Pong showed Middleberg a
document with Chinese characters, representing it to be
a Chinese patent. Middleberg, who does not read
Chinese, relied on Pong’s representation. Id. at 602. The
samples provided [*42] by Pong and the accused
products at issue in this lawsuit were “[e]ssentially” the
same. Middleberg Dep. Tr. at 94-95. Pong proposed that
Marquis acquire the product design to sell it to a U.S.based manufacturer. Id. at 59-60.
Middleberg and Pong knew of Focus Products and the
HOOKLESS® product. The two had spoken about Focus
“many times.” Tr. at 554. And Pong had formerly worked
for Waytex, a manufacturer that supplied the
HOOKLESS® product to Focus and its predecessor A&A
LLC, and was “part of [Focus’s] product development
team and . . . manufacturing team. Id. Pong stated that
his product competed with Focus’s HOOKLESS®
product, but claimed his design was “original” and
“unique.” Middleberg Dep. Tr. at 61-62. Pong also
represented that he had consulted with his attorney and
understood that Focus’s patents in the HOOKLESS®
technology had expired or were due to expire soon, and
that Pong would soon secure his own patent on the
sampled shower curtain ring. See Tr. at 555 (Middleberg
testifying that “[Pong] mentioned to me that it had
become a public domain kind of product; that the patent
had run out or was about to run out”). Middleberg
concluded
that,
if
Marquis
and
its
U.S.
customers [*43] “could come into the market with this
new idea, we might be able to carve out a niche for
ourselves.” Id. Pong connected Middleberg to Pong’s
lawyer, Tommy Wang, who stated “that [Pong’s] patent
was pending and . . . felt confident that it would be
issued.” Id. at 554; see also id. at 582.
Despite knowing of Focus’s HOOKLESS® product,
Middleberg did not investigate whether Marquis’s plan to
roll out Pong’s proposed product was limited by any valid
United States patent—including as owned by Focus or
its affiliates. Id. at 554. No Marquis official, employee, or
attorney investigated whether A&A LLC or Focus held
valid intellectual property rights in the HOOKLESS®
technology, or whether Pong’s proposed design might
infringe those. Middleberg “rel[ied] on what Pong told
[him]” in forming his belief that there was no legal
impediment to Marquis’s ability to sell the accused
product. Middleberg Dep. Tr. at 72-75.
knowing of Focus’s existing patents in the HOOKLESS®
technology, she was not concerned that Kartri’s Ezy
Hang products might infringe Focus’s rights. Goskowski
Dep. Tr. at 41-43. Goskowski did not seek advice from
counsel. Id. at [*44] 43; see also Tr. at 643 (Kubus,
testifying that “[Middleberg and Marquis] came with the
name EZY-Hang and moved forward with the design,
listening to Mr. Middleberg and Marquis that there was a
patent, that everything was clear and safe, as I use the
word ‘safe.’ It may not be the right word, but that’s the way
we approached it”).
2. Late 2012—August 2013: Marquis Presents the
Design Samples to Kartri; Kartri Purchases Test
Orders; Defendants Profess Ignorance of Legal
Restrictions on Their Sales of the Accused Products
In late 2012 or early 2013, during a sales meeting
between Star Linen and Kartri, Middleberg, acting as
Marquis’s representative, presented Pong’s pitched ring
to Dolph—and possibly Kubus—of Kartri. Tr. at 549, 553,
641; Middleberg Dep. Tr. at 58-59, 83-84. Kartri’s
representatives “expressed some interest and took the
samples back to their offices,” Middleberg Dep. Tr. at 81.
By this time, as Goskowski admitted, “the hospitality
market had . . . gone in the direction of hook-free
curtains,” and Focus had established a dominant market
share, to the detriment of sellers of hooked shower
curtains, Tr. at 660-61. Kartri felt market pressure from its
customers to pivot toward [*45] vendors of non-hooked
shower curtains. Id. at 663-64 (Goskowski). Thus, “in an
effort to keep up with , . . . the changing business in the
hospitality area, [Kartri] decided to purchase [the
proposed curtain design] from Marquis.” Id. at 661.
Marquis and Kartri, assisted by Pang, experimented with
refinements to Pong’s sample, including because, in the
initial product, “the fabric tended to pull away from the
grommet.” Tr. at 553, 556; Middleberg Dep. Tr. at 84,89.
Although the D-shaped ring’s initial design included a
straight slit with no angles, Marquis and Kartri ultimately
settled on a D-shaped ring with a slit in the shape of a
“lightning bolt”—the angled slit visible in the accused
product. Tr. at 557,593 (Middleberg). This design choice
was advantageous because such rings could be snapped
onto the shower curtain rod with one hand—allowing
hospitality staff installing such curtains to secure
themselves with their free hand. Id. at 558
(Middleberg).19
Kartri’s Goskowski similarly testified that, despite
19 At trial, Middleberg sought to demonstrate this by having an
assistant hold up a shower rod and Middleberg execute a onehanded installation. The demonstration went less than
Page 16 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
In or about August 2013, Kartri began purchasing small
“test orders” of the accused product. Middleberg Dep. Tr.
at 95-96,124-25. Kartri sold those to other resellers. Id.
Those products were met with “positive reception,” and
Kartri, [*46] through Kubus, began to place larger
orders. Middleberg Dep. Tr. at 97-98. Although Marquis
and Kartri knew they were competing with Focus’s
HOOKLES SO products on price and design, Middleberg
testified that he and other executives believed Pong’s
representation—that Focus’s patents were “running
out”—until the point that Focus accused Marquis of
infringement, Middleberg Dep. Tr. at 99-100,108-09. He
also testified that he believed—until the Court’s 2018
ruling following the Markman hearing in this case—that
Focus’s patents did not cover the particular design of the
Ezy Hang curtain ring. See Tr. at 587-88 (“The way it was
described to me was that . . . it was like a whole pizza and
that prior to the Markman hearing, that the [USPTO] had
ruled that each slice of the pizza with its own toppings . .
. had to be patented itself. After the Markman hearing,
the Mudge said no, that’s too restrictive and you can
patent the whole pizza, and that was the way I
understood it.”). Middleberg did not have any training or
expertise in patent law. Id. at 595, 665.
3. August 2013-February 2015: Communications
Within Defendants Admitting the Similarity Between
the Accused Products
Kartri marketed its [*47] accused product under the
brand “Ezy Hang.” See, e.g., Kubus Dep. Tr. at 18-20.
When customers inquired whether Kartri sold hookless
products, Kartri personnel were directed to respond that
Kartri could not sell that exact product, but that its
competing Ezy Hang products were an adequate
substitute. Id. at 18-23. If a client was interested in Ezy
Hang, Kartri would “take it from there.” Id. at 24. Kartri
adopted this approach because it was “just trying] to do
business. . . . [F]or 25 years, I’ve sat on the sidelines
because [the market has] been monopolized by
Hookless. I could never supply anything.” Id at 24.
The following communications of or with Kartri
employees and executives, plaintiffs argue, reflect
Kartri’s appreciation—even before February 2015, when
Focus sent a cease-and-desist letter to Kartri—of the
strong similarity between plaintiffs’ and defendants’
products:
stating, “if I understand correctly [Fairfield Inn]
want[s] the same product that [A&A LLC] is using.
What was your understanding?” Kubus responded
by proposing to fill an order of the accused product
“thinking we might get lucky.” Middleberg Dep. Tr. at
127, 128, [*48] 130.
* On December 18, 2013, Dolph, Kartri’s sales
operations manager, sent an email with the subject
line “HOOKLESS” to Kimberly Ihsen, product
manager at Best Western International. The email
stated that Kartri has “a version of hookless called
EZY Hang, [and] we would like to know how we can
go about getting this product considered as an
offering on Best [W]estern supply.” PTX 230 at 2.
* On April 24, 2014, in an email exchange among
Pam Cales of GMK Associates and, inter alia, Sarah
Woody, a Kartri sales director, Cales requested a
price quote for “Hookless shower curtain[s].” Woody,
without correcting Cales’s misperception, provided
the requested quote. PTX 231.
* Between December 8 and 16, 2014, in an email
exchange initiated by retail customer Rick Roberts,
Roberts requested a price quote for “Hookless
Shower Curtains,” Dolph quoted a price for a
“Hookless Double H Chevron pattern” curtain. PTX
232.
Kartri also frequently received phone calls from
consumers attempting to order Focus’s products. Kubus
testified that consumers often called Kartri demanding
“Hookless” products, and “they either have a picture
attached from Focus’s website. . . . And it’s just known in
the industry. [*49] I mean, they’ve bombarded the
industry with that particular product because it saves the
housekeeper time and money to put this product up. It’s
just known. [Zahner has] done really well in that
marketing direction.” Kubus Dep. Tr. at 52-53. She
estimated that 50% of buyers inquiring about hookless
shower curtains asked Kartri for Focus’s products. Id. at
53.
In early 2014, Middleberg heard “from fabric suppliers,
weavers, jobbers, people with whom we’ve had years of
relationships that the suppliers weren’t getting paid; that
Focus was in financial trouble; that it was—that there was
an opportunity in the market for us to get aggressive and
get out there and sell because they had been cut off by
their suppliers.” Tr. at 573.
* On August 30, 2013, Middleberg emailed Kubus,
smoothly; as Middleberg “very much used two hands
throughout the entire process.” Tr. at 567-71.
Page 17 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
4. February 27, 2015-2017: Focus Issues a Ceaseand-Desist Letter and Sues Kartri; Defendants
Continue to Sell the Accused Products
On February 27, 2015, Focus, through counsel, sent a
letter to Marquis stating that its manufacture and sale of
the accused products infringed Focus’s intellectual
property rights, and demanding Marquis cease and
desist. PTX 152 at 1.20 That day, Woody, Kartri’s general
office sales director, forwarded the letter to Kartri’s
owners Goskowski [*50] and Kubus, who brought the
letter to Middleberg’s attention. PTX 166. The same day,
Middleberg replied: “Don’t worry about this [Pong and I]
will submit our pa[t]ent number. There is nothing they can
do.” PTX 166 at 1; Tr. at 608. Middleberg did not confer
with counsel before so responding, and “did nothing in
response to this letter.” Tr. at 608. Kubus did not ask
Middleberg whether he had conferred with counsel in
reaching this conclusion. Id. at 773. At some point in this
period, Goskowski conferred with Kartri’s counsel,
Bernhard Molldrem, and “came away with the
understanding that [she was] complying with the law.” Id.
at 648-49.
Marquis and Kartri thereafter “continued to market the
product,” Middleberg Dep. Tr. at 113, 121, for another
three-and-a-half years, until November 12, 2018, three
months after this Court issued its Markman ruling on
August 9, 2018. Tr. at 587, 615, 654. Communications
during this period, including the following, bear on
defendants’ contention that until then, they did not
appreciate that their Ezy Hang product might be infringing
Focus’s patents or marks.
Reliance on purported Chinese patent: On March 3,
2015,
days
after
receiving
the
cease-anddesist [*51] letter, Goskowski emailed Middleberg and
Kubus, asking, “David, how do we get away with a China
patent? How does that cover us in the U.S.?” See
Goskowski Dep. Tr. at 99 (quoting email in PTX 167).
Goskowski nevertheless testified that, upon seeing
Pong’s purported patents, she believed despite these
20 Before receiving the cease-and-desist letter, Kubus knew that
Focus manufactured and distributed hook-free shower curtains
for hotels, but had not inquired into Focus’s patents. Tr. at 645
(Kubus). At an unspecified date before receiving the letter,
Goskowski received a phone call from Bucklew, Focus’s thenpresident. In that call, Goskowski told Bucklew that in her view,
Kartri was not infringing. Tr. at 648-49 (Goskowsld).
21 See PTX 28-1 (declaration by Goskowski, stating that 2013,
Mr. David Middleberg, contacted us to introduce a new style
shower curtain that had an embedded buckle incorporated in
being in Chinese and untranslated—that these covered
Kartri’s Ezy Hang products. Id. at 99-100.21 Goskowski
never sought a translation of the Chinese-language
patent. Tr. at 668. Although she attested that she had
received the Chinese-language patents in 2013, these
bear the date March 19, 2014. See PTX 28-1 at 12.
Goskowski testified that she had relied on Middleberg’s
claim to have found reliable Pong’s claim to own a
Chinese patent that would protect the Ezy Hang design
in the United States, and believed Kartri’s products were
covered by that patent. Tr. at 674. Goskowski never
contacted her attorney, Molldrem, about the purported
Chinese patents. Id. at 675.22
Filing of Focus’s first lawsuit: On June 30, 2015, Focus
filed the first of two lawsuits today consolidated in this
action. Its Complaint alleged that Kartri had infringed
design patent ‘232 and the utility patents ‘248, ‘609, and
‘088. Focus [*52] Prods. Grp. Int’l, LLC et al. v. Kartri
Sales Co., No. 15 Civ. 5108 (PAE) (S.D.N.Y.), Dkt. 1. The
lawsuit was served on Kartri on September 11, 2015.
See id., Did, 8.
Discovery of Carnation’s EZ-ON product: In summer
2015, Kartri discovered Carnation’s nearly identical EZON product. Tr. at 676 (Goskowski). The packaging of
Carnation’s product, Goskowski admitted, displayed on
the front the language “using patented hookless
technology,” and listed the applicable U.S. patents—the
design and utility patents at issue in this suit on the back.
Tr. at 678; see PTX 28 (Goskowski declaration) at 1
(“During the summer of 2015, we discovered [a] shower
curtain, sold by Carnation . . . which had embedded flattop rings that have an overall shape similar to the buckles
in Kartri’s Ezy-Hang curtains.”)
Decision not to conduct an infringement analysis: On
September 21, 2015, Pong, prompted by Middleberg,
emailed his lawyer Wang, asking for his view whether the
Ezy Hang product likely infringed the Focus patents,
whether Pong’s patent was valid, and whether Wang
its top margin,” that “Mr. Middleberg had his supplier in China
send [Kartri] patents that the supplier had obtained for the
shower curtain embedded buckle,” and that one such patent
was “Chinese Utility Model patent CN 203852180 U (in English
translation),” and another was “Chinese Design Patent CN
302766325 S (no translation available).”).
22 Middleberg later abandoned his view that Kartri’s sales were
lawful after Pong admitted to him that he did not in fact own a
valid Chinese patent. Tr. at 603. The record does not reflect
whether or when Middleberg communicated this to Kartri.
Page 18 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
would be prepared to defend Pong in a lawsuit. PTX 258
at 2. On September 22, 2015, Wang responded, offering
to conduct an infringement analysis [*53] and draft an
infringement report for $3,500. Id. Marquis did not
commission this analysis, despite Middleberg’s
awareness that Focus had claimed infringement of its
design (`232) and two utility (`248 and ‘609) patents. Tr.
at 599, 601 (Middleberg). Middleberg testified that, “in
retrospect,” Marquis “probably shouldn’t have” continued
to manufacture the accused Ezy Hang product, “but at
the time we thought we were right and we continued to
move forward.” Tr. at 600.
Filing of Focus’s second lawsuit: On December 30,
2015, Focus filed the instant action against Kartri. Focus
Prods. Grp. Int?, LLC et al. v. Kartri Sales Co., Inc., No.
15 Civ. 10154 (PAE) (S.D.N.Y.), Dkt. 1. On February 4,
2016, Kartri brought Marquis into this action by initially
filing a third-party complaint against it. Id. Dkt. 11; see
also id. Dkt. 19 (Marquis waiver of service executed
February 10, 2016).
Pong’s statements to Middleberg about a pending
U.S. patent: After litigation began, Pong claimed to
Middleberg that he had a pending United States patent
on the Ezy Hang product. On February 2, 2016,
Middleberg emailed Pong: “When we last spoke in China
you mentioned that the US Patent on the shower curtain
buckle [*54] would be given to you in February [of 2016].
Can you please update me on perhaps a more specific
date on which you expect to receive the patent?” PTX
183 at 2. Pong responded that patent approval would
take “another 6— 8 months.” Id. at 1. Marquis’s president,
Ranieri, interjected that “6-8 months could prove to be a
problem.” Id. Marquis nonetheless continued to sell the
accused products to Kartri, for resale to hospitality or
retail customers, believing that “Focus [was] in deep
financial trouble,” and that it and Kartri could “take
advantage of that vulnerability.” Tr. at 610-11
(Middleberg).
Hartri’s wariness of Pong: On January 19, 2016,
Goskowski emailed Middleberg, expressing frustration
that he had had asked Kartri to accept payments directly
from Pang, of whom her counsel had urged Kartri to steer
clear. PTX 182.23
Continued sales to customers of “Hookless”
curtains: After litigation began, Kartri continued in
internal and customer communications to hold out Ezy
23 See also PTX 182 at 1 (Kartri email to Middleberg, stating
“now you want me to take a check from [Pang] and put it
Hang as equivalent to the HOOKLES SS product. On July
1, 2015, Woody, in an email to Kubus, referred to a
certain Ezy Hang product as “our equivalent of the
Hookless Double H pattern.” PTX 217. In an email
exchange [*55] between May 11 and 23, 2016, Kubus
and Cheryl Hicks, a Kartri customer support
representative, discussed a price quote for a hospitality
customer seeking a “sub[stitute] or similar item” for an
out-of-stock Focus product. PTX 609. In an email
exchange in June 2016, retail customer Karen Teska of
Standard Textile requested a quote for “Hookless shower
curtains using our matrix fabric.” Dolph quoted a price for
Ezy Hang. PTX 246.
K. Procedural History of This Litigation
1. December 30, 2015—December 21, 2017: The
Prior Related Action
On June 30, 2015, ZDG, HSNA, and Focus (the “original
plaintiffs”) sued Kartri, alleging willful infringement of the
utility patents ‘248, ‘609, and ‘088 and of the EZ-ON
Trademark, and unfair competition under the Lanham Act
and New York law. Focus Prods., 15 Civ. 5108, Dkt. 1.
On October 1, 2015, Kartri answered and filed
counterclaims. Dkt. 9. On October 26, 2015, the original
plaintiffs answered. Dkt. 16. On February 8, 2016, Kartri
filed a third-party complaint alleging that Marquis was the
liable party. Dkt. 22.
2. December 30, 2015-December 21, 2017: Initial
Stages
On December 30, 2015, the original plaintiffs filed the
initial complaint in this litigation against Kartri, alleging
willful infringement of [*56] the design patent ‘078. Dkt.
1; see also Dkt. 7 (refiling). On February 4, 2016, Kartri
filed a third-party complaint against Marquis, alleging that
Marquis was the liable party. Dkt. 11; see also Dkt. 13
(refiling). On February 9, 2016, Kartri moved to dismiss.
Dkt. 16. On March 1, 2016, the original plaintiffs filed the
first amended complaint against defendants, now
alleging willful infringement of the design patent and the
utility patents, and willful infringement of, and unfair
competition with, the EZ-ON and Hookless Trademarks
and the original plaintiffs’ trade dress, and adding
thr[ough] my company and send something back to you, NOT
GOING TO happen, I am not going to take the chance of an
audit by them and have them see a check from Pong”).
Page 19 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
Marquis as a third-party defendant. Dkt. 20. On March 22,
2016, Kartri filed, and on March 24, 2016, refiled, a partial
motion to dismiss and strike certain allegations from the
amended complaint, a memorandum of law, supporting
exhibits, and a declaration in support. Dkts. 26-29. On
April 11, 2016, the original plaintiffs opposed the motion.
Dkts. 33-34. On April 12, 2016, the original plaintiffs
voluntarily dismissed the related action at 15 Civ. 5108
and converted Kartri from a third-party defendant into a
defendant. Dkts. 28, 32, 36. On April 18 and 19, 2016,
Kartri filed a reply in support of its motion
to [*57] dismiss. Dkts. 39-41. On May 5, 2016, the
original plaintiffs filed the second amended complaint,
amending claims and adding factual allegations. Dkt. 47.
On May 26, 2016, Marquis filed a partial motion to
dismiss. Dkt. 55. On June 17, 2016, the original plaintiffs
opposed the motion, Dkt. 58, and, on June 24, 2016,
replied, Dkt. 59.
On July 14, 2016, the Court denied both motions to
dismiss in their entirety. See Dkts. 63, 77 (bench ruling
transcript). On July 25, 2016, the Court approved a case
management plan and consolidated this case with 15 Civ.
5108. Dkts. 65, 67. On July 26, 2016, the original plaintiffs
filed a third amended complaint consolidating all
allegations from the two actions. Dkt. 68. On July 27,
2016, the Court dismissed 15 Civ. 5108 with prejudice.
See 15 Civ. 5108, Dkt. 30. On July 28, 2016, both
defendants answered and filed counterclaims. 15 Civ.
10154, Dkts. 69, 70. On August 17, 2016, the original
plaintiffs answered defendants’ counterclaims. Dkts. 75,
76.
24 On December 22, 2017, plaintiffs filed an opening Markman
brief. Dkt. 169. On January 22, 2018, defendants filed Markman
briefs and supporting exhibits. Dkts. 173, 174. On February 5,
2018, plaintiffs filed reply briefs. Dkts. 177, 179. On February 9,
2018, Marquis sought leave to file, and submitted, a sur-reply.
Dkt. 181. On February 14, 2018, plaintiffs consented to
Marquis’s filing of the sur-reply, on the condition that the Court
also consider plaintiffs’ responsive letter brief. Dkt. 182.
25 The Court construed the utility patents’ terms as follows. For
the ‘248 patent, the term “item” as “curtain,” Dkt. 198 at 6; for
all three utility patents, the term “ring” as “a piece of material
that is curved at least in part and that generally encloses and
reinforces an opening,” id. at 7; for all three utility patents, the
term “inner circumference” as “inner edge that is curved, at least
in part,” id. at 13; for all three utility patents, the term “outer
circumference” as “outer edge that is curved, at least in part,”
id.; for the ‘248 patent, the term “comprising a top” as “the
uppermost point of the inner circumference of the ring; where
the ring has more than one such point, the centermost such
point,” id. at 15; for the ‘248 patent, the term “approximately
Over the next 13 months, discovery proceeded,
contentiously. See, e.g., Dkts. 106, 112, 125. On
September 19, 2017, the Court ordered the filing of a
Fourth Amended Complaint. Dkts. 145, 158. On
September 29, 2017, that complaint-now [*58] entailing
all plaintiffs in the action-was filed. Dkt. 148 (“FAC”). On
October 12, 2017, Kartri filed a motion to dismiss or
transfer for improper venue. Dkt. 149. On October 13,
2017, both defendants answered the FAC and filed
counterclaims. Dkts. 150, 151. On October 27, 2017,
plaintiffs opposed Kartri’s motion and filed supporting
declarations and exhibits. Dkts. 153-154.
On December 21, 2017, the Court denied Kartri’s motion
in a bench ruling. Dkt. 171.
3. July 7, 2017-August 9, 2018: The Markman
Hearing and Ruling
On July 7, 2017, the parties filed their original joint claims
chart, Dkt. 124, and, on November 22, 2017, an amended
such chart. Dkt. 162.24 On July 26, 2018, the Court held
a Markman hearing. See Dkt. 193 (transcript). On August
9, 2018, the Court issued its Markman ruling, construing
16 disputed terms relevant to the utility patents. Dkt.
198.25
4. March 5, 2019—January 4, 2021: The Summary
Judgment Decisions
horizontal component”—which referred to the slit in the ring—
as “a component that is either level or nearly so,” id. at 20; for
the ‘248 patent, the term “said slit exits said ring at said upper
edge of said curtain” as “the slit exits the ring at or near the
upper edge of the curtain,” id. at 22; for the ‘248 patent, the
term “closed ring” as “a slit where the ring is ‘closed’—that is,
the two radial edges adjacent to the slit are pressed together,”
id. at 23; for the ‘609 and ‘088 patents, the term “projecting
edge” as “an edge that projects from the outer circumference of
the ring,” id. at 25; for the ‘609 patent, the term “next to said
slit” as “adjacent to the slit,” id.; for the ‘609 patent, the term
“extends towards the ceiling” as “points upward (would hit the
ceiling if extended),” id. at 26; for the ‘248 and ‘609 patents, the
term “offset said top” as “to a side of the top,” id. at 27; for the
‘609 patent, the term “slit extends through” as “slit passes
through,” id. at 28; for the ‘609 and ‘088 patents, the term
“o’clock position” as “corresponding to the position on a
standard 12-hour clock face”; and for the ‘609 patent, the term
“approximately the 1 o’clock or 2 o’clock position on said ring”
as “the area between and around the 1 o’clock and 2 o’clock
positions on a standard 12-hour clock face,” id. at 33.
Page 20 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
On March 5, 2019, the Court held a pre-motion
conference. See Dkts. 230, 241 (transcript). On March
26, 2019, plaintiffs filed a summary judgment motion and
supporting materials on their claims of design patent
and [*59] trade dress infringement and on damages
theories. See Dkts. 243, 244. They also moved to
preclude defendants from offering revenue and cost
data—and expert testimony based on it—that they had
not produced in fact discovery. Dkt. 246.
On April 17, 2019, defendants filed a cross-motion and
supporting materials on their counterclaims that plaintiffs’
Hookless Trademark is invalid, that defendants had not
infringed the EZ-ON Trademark, and that plaintiffs lacked
standing to allege infringement of the EZ-ON Trademark.
Dkts. 253, 255. They also opposed plaintiffs’ motion to
preclude. Dkt. 254. On May 7, 2019, plaintiffs filed an
opposition to defendants’ cross-motion and reply, a reply
in support of their motion to preclude, and supporting
materials. Dkts. 272-275. On May 21, 2019, defendants
filed their reply and supporting materials. Dkt. 288.
On April 16, 2020, the Court resolved the cross-motions
for summary judgment, and held the motion to preclude
in abeyance. Dkt. 297. On May 14, 2020, plaintiffs moved
for limited reconsideration of the Court’s holding that
plaintiffs’ trade dress was generic and a memorandum
and exhibits in support. Dkt. 303. On May 27, 2020,
defendants filed a memorandum [*60] in opposition. Dkt.
305. On June 5, 2020, plaintiffs replied. Dkt. 308. On
June 30 and July 1, 2020, plaintiffs supplemented their
briefing. Dkts. 309, 310.
On January 4, 2021, the Court granted plaintiffs’ motion
for reconsideration, reversing its holding that their trade
dress was generic and reserving that issue for trial. Dkt.
312.
5. April 15, 2021-June 24, 2022: Final Pretrial Matters
On April 15 and 16, 2021, the parties filed their joint
pretrial order and proposed voir dire and jury instructions.
Dkts. 323, 329, 345, 346. On April 15, the parties filed
motions in limine—five by plaintiffs, Dkts. 324-328, three
by Marquis, Dkts. 338, 340, 342, and 12 by Kartri, Dkts.
330-337, 339, 341, 343, 344, On May 21, 2021, the
parties filed oppositions. Dkts. 366-381. On May 28,
2021, the parties filed replies. Dkts. 383-387. On August
5, 2021, the Court resolved plaintiffs’ motions in limine in
a bench ruling. Dkts. 393, 412 (transcript). On November
23, 2021, the Court resolved defendants’ motions in
limine in a bench ruling. Dkts. 425, 433 (order), 436
(transcript).
On April 13, 2022, the parties consented to a bench trial.
Dkt. 443. On April 25, 2022, the Court scheduled trial for
June [*61] 15-17 and June 27-29, 2022. Dkt. 444. On
May 14, 2022, defendants filed proposed findings of fact,
conclusions of law, and a supporting exhibit. Dkt. 453. On
May 20, 2022, defendants filed excerpts of supporting
deposition testimony. Dkt. 454. That same day, plaintiffs
filed their proposed findings of fact, conclusions of law,
and supporting exhibits and deposition testimony
excerpts. Dkt. 455. On June 3, 2022, defendants filed
objections to plaintiffs’ witness declarations. Dkt. 463. On
June 7, 2022, the Court adjourned the June 15-17 trial
dates, kept the June 27-29 trial dates, and scheduled
new trial dates for July 26-28, 2022. Dkt. 468. On June
10, 2022, plaintiffs responded to defendants’ objections.
Dkt. 471. On June 21, 2022, the Court overruled these
objections. Dkt. 474. On June 24, 2022, defendants
submitted further objections to plaintiffs’ witness
declarations. Dkt. 478.
On June 27-29 and July 26-28, 2022, the Court held a
bench trial. On August 11, 2022, plaintiffs filed updated
proposed findings of fact and conclusions of law. Dkt.
494. On August 25, 2022, defendants did the same. Dkt.
500.
II. Conclusions of Law as to Liability on the Claims
Before the Court
A. Jurisdiction [*62]
The FAC brings claims of patent infringement under 35
U.S.C. §§ 101 et seq. (Count I), and of trademark
infringement and unfair competition under 15 U.S.C. §
1125(a) (Count II). The Court has subject matter
jurisdiction over these claims under 28 U.S.C. § 1331.
See Smith v. Harris, No. 21 Civ. 571 (PAE), 2021 U.S.
Dist. LEXIS 193428, 2021 WL 4655943, at *2 (S.D.N.Y.
Oct. 6, 2021) (citing Bay Shore Union Free Such. Dist. v.
Rain, 485 F.3d 730, 734-35 (2d Cir. 2007)).
Count III brings a New York common law claim of unfair
competition with plaintiffs’ Trade Dress. The Court has
subject matter jurisdiction over this claim under 28 U.S.C.
§ 1367, as it arises from a common nucleus of fact as the
federal claims, in that all turn on the same allegedly
infringing conduct. United Mine Workers of Am. v. Gibbs,
383 U.S. 715, 725, 86 S. Ct. 1130, 16 L. Ed. 2d 218
(1966).
Page 21 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
B. Standing Under the Lanham Act
At the threshold, the Court must determine whether any
plaintiff has standing under the Lanham Act to bring
claims of infringement and unfair competition for the
Hookless Mark, the EZ-ON Mark, and the Trade Dress.
This turns on whether any plaintiff owns the two marks
and Trade Dress. The parties particularly contest
ownership of the EZ-ON Mark.
1. Applicable Legal Framework
Section 43(a) of the Lanham Act protects registered and
unregistered marks against the use of any word, term,
name, symbol, or device “likely to cause confusion, or to
cause mistake, or to deceive as to the affiliations,
connection, or association of such person with another
person, or as to the origin, sponsorship, or
approval [*63] of his or her goods, services, or
commercial activities by another person.” 15 U.S.C. §
1125(a)(1)(A). The Lanham Act “provides separate
causes of action for, among other things, infringement of
registered and unregistered trademarks.” Fed. Treasury
Ent. Sojuzplodoimport v. SPI Spirits Ltd, 726 F.3d 62, 72
(2d Cir, 2013); see 15 U.S.C. § 1114 (registered
trademark); id. § 1125 (unregistered trademark or trade
dress). An infringement action under § 1114 for
registered trademarks—such as the HOOKLESS®
Mark—is available only “to ‘registrant[s]’ of the
trademarks at issue, which the Act defines to embrace
the
actual
registrant’s
‘legal
representatives,
predecessors, successors and assigns.'” SPI Spirits, 726
F.3d at 72 (quoting 15 U.S.C. § 1127). By contrast, §
1125(a) allows “any person who believes that he or she
is or is likely to be damaged” by a defendant’s actions to
bring an infringement action for an unregistered
trademark or a trade dress. 15 U.S.C. § 1125(a). A
plaintiff must also show that the trademark or trade dress
is valid, See LVL XIII Brands, Inc. v. Louis Vuitton
Malletier S.A., 209 F. Supp. 3d 612, 649 (S.D.N.Y. 2016),
aff’d, 720 F. App’x 24 (2d Cir. 2017).
2. Ownership and Validity of the HOOKLESS® Mark
“A certificate of registration with the PTO is prima facie
evidence that the mark is registered and valid (i.e.,
protect[a]ble), that the registrant owns the mark, and that
the registrant has the exclusive right to use the mark in
commerce.” Capri Sun GmbH v. Am. Beverage Corp.,
414 F. Supp. 3d 414, 433 (S.D.N.Y. 2019) (quoting
Christian Louboutin S.A. v. Yves Saint Laurent Am.
Holding, Inc., 696 F.3d 206, 217 n.10 (2d Cir. 2012))
(alteration in Capri Sun). “As such, when a
plaintiff [*64] sues for infringement of its registered mark,
the defendant bears the burden of production and
persuasion to rebut the presumption of ownership.”
C=Holdings B. V. v. Asiarim Corp., 992 F. Supp. 2d 223,
239 (S.D.N.Y. 2013) (citing, inter alia, Abercrombie &
Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 14 (2d Cir.
1976)).
Plaintiffs have produced certificates of registration that
meet their prima facie burden. These show that, on June
6, 2000, ZDG registered the Hookless Mark on the PTO’s
Principal Register under registration number 2,355,554,
PTX 84, and on August 29, 2000, ZDG registered the
Hookless Mark on the PTO’s Supplemental Register,
PTX 85. On a date the record does not specify, the PTO
refused to continue the Hookless Mark’s registration, on
the grounds that it was merely descriptive of the shower
curtain product. See PTX 87. On November 23, 2009,
ZDG filed a response opposing that determination. Id. On
August 3, 2010, ZDG registered the Hookless Mark on
the PTO’s Supplemental Register under registration
number 3,829,837. PTX 86. On April 17, 2012, ZDG
registered the Hookless Mark on the PTO’s Principal
Register under registration number 4,127,283. PTX 520.
Defendants have not adduced evidence of the Hookless
Mark’s invalidity. As the Court explained in its summary
judgment decision on April 21, 2020, plaintiffs have
accused [*65] only Kartri of infringing the Hookless
Mark. Marquis thus lacked standing to challenge the
mark’s validity. Dkt 297 at 20. And, the Court held, Kartri
had failed to timely assert the defense and thereby
waived it. See id. (“Failure to plead an affirmative defense
ordinarily results in forfeiture of that defense.” (quoting
Foster v. Lee, 93 F. Supp. 3d 223, 229 (S.D.N.Y. 2015))).
The Court accordingly finds the Hookless Mark valid and
that plaintiffs own that mark. Plaintiffs have standing to
bring their Lanham Act claims pertaining to the
HOOKLESS Mark.
3. Ownership and Validity of the EZ-ON Mark
a. Ownership
To establish ownership over an unregistered trademark,
a plaintiff must show “prior use of the trademark.” Dual
Groupe, LLC v. Gans-Mex LLC, 932 F. Supp. 2d 569, 573
(S.D.N.Y. 2013). “[A] plaintiff can demonstrate prior use
Page 22 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
through licensing the trademark to a licensee.” Id. at 574
(citing Haw.-Pac. Apparel Grp. Inc. v. Cleveland Browns
Football Co. LLC, 418 F. Supp. 2d 501, 506 (S.D.N.Y.
2006)). This is so even where the “first and only use of
the mark was made … by the licensee,” so long as the
licensor “exercise[s] some control over the licensee’s use
of the mark.” Id. (citing Twentieth Century Fox Film Corp.
v. Marvel Enters., Inc., 277 F.3d 253, 259 (2d Cir. 2002)).
Plaintiffs argue that the February 1, 2012 Carnation
License Agreement, PTX 370, unambiguously conferred
ownership of the EZ-ON Mark on plaintiffs’ predecessor
A&A LLC, and thus gave plaintiffs standing to bring
infringement and unfair competition claims [*66] as to
that Mark. The Court must therefore interpret that
Agreement to determine whether this is so.
“Under New York law, the interpretation of a contract ‘is
a matter of law for the court to decide.'” Lantheus Med.
Imaging, Inc. v. Zurich Am. Ins. Co., 650 F. App’x 70, 71
(2d Cir. 2016) (summary order) (quoting Int’l Multifoods
Corp. v. Com. Union Ins. Co., 309 F.3d 76, 83 (2d Cir.
2002)). “If the Court finds contract provisions to be
unambiguous, then it must interpret those provisions in
light of ‘their plain and ordinary meaning.'” Id. (quoting 10
Ellicott Square Ct. Corp. v. Mountain Valley Indem. Co.,
634 F.3d 112, 119 (2d Cir. 2011)). “However, if the
contract is ambiguous and relevant extrinsic evidence as
to its meaning is available, its interpretation is a question
of fact for the factfinder.” New Windsor Volunteer
Ambulance Corps, Inc. v. Meyers, 442 F.3d 101, 111 (2d
Cir. 2006). “In interpreting an ambiguous contract
provision, the factfinder ‘should, when possible, apply the
same measure as the parties have applied in performing
their obligations.'” Id. at 112 (citations omitted).
The Carnation License Agreement unambiguously gave
A&A LLC, Focus’s predecessor, control over Carnation’s
use of the intellectual property that is the subject of that
agreement. Section 4.1 states that the “sublicense to
Carnation is non-exclusive with respect to ZDG’s current
licensees, namely HSNA, A&A [LLC and others].” Section
4.2 states that, “[a]s part of said sublicense, [A&A LLC]
hereby grants [Carnation] the right to use [*67] the
following trademark on the Licensed Products: ‘EZ ON
Shower Curtain[.]'” And § 5.3 requires that Carnation
assign, inter alia, “any intellectual property falling within
the scope of Licensed Patents, Licensed Trademarks, or
Licensed Products . . . or a patent or trademark
application is filed for by sublicensee during the term of
this agreement.”
The only point of contention between the parties is
whether the EZ-ON Mark falls within the scope of the
Carnation License Agreement, that is, whether the
agreement required Carnation to assign the EZ-ON
Trademark when it applied for its registration with the
PTO.
For three independent reasons, the Court finds that, by
its unambiguous terms, the Carnation Licensing
Agreement bound Carnation to assign its rights in the EZON Trademark to ZDG.
First, § 1.6 defines the “Licensed Products” as “shower
curtains having integrated rings of the form depicted in
Appendix A” and “any rings having a substantially similar
appearance to that shown in Appendix A, namely, rings
having a flat upper edge, an opening for suspension of
the shower curtain on a shower rod, and a diagonal slit
for placement of the opening on the shower curtain rod,
wherein the [*68] slit extends from the inner
circumference of the opening to the outer circumference
of the opening, and wherein said diagonal slit is within +115 degrees from that shown in Appendix A.” Comparing
the images of Appendix A to the Carnation License
Agreement and the EZ-ON Mark as Carnation used it at
the time makes clear the two are “substantially similar.”
Appendix A
Page 23 of 82
Focus Prods. Grp. Int’l, LLC v. Kartri Sales Co.
right that [they] possessed.”). But he did not dispute that,
under § 4.2, plaintiffs had granted Carnation the right to
use the EZ-ON Mark. Id. Pressed, Mayer acknowledged
that “what [§ 4.2] says” was that A&A LLC had granted
Carnation a sublicense in the EZ-ON Mark. Id. And when
questioned whether “someone [could] sublicense rights if
they don’t own those rights,” Mayer conceded, “I would
think not.” Mayer Dep. Tr. at 138-39. In any event, the
plain language of the agreement controls, not one party’s
claimed understanding. Lantheus Med. Imaging, 650 F.
App’x at 71. In light of the plain language of § 4.2,
Carnation was undeniably required to assign the
unregistered EZ-ON Mark and its trademark application
to ZDG.26
Second, under § 4.2, A&A LLC “grants” Carnation the
right to use the mark “EZ ON Shower Curtain”—at the
time unregistered—on its licensed products. The
restrictions that the Carnation License Agreement
imposes on these products thus restrict the use of the EZON Mark on those products. It would not have made
sense for licensor A&A LLC to grant Carnation the right
to use the EZ-ON Mark on its shower curtain products if
Carnation owned the Mark.
Defendants argue that Carnation has professed a
contrary subject understanding of § 4.2, and that
Carnation’s understanding should control. That
contention does not fairly reflect the record. Mayer,
Carnation’s CEO, testified that he viewed § 4.2 to mean
merely that A&A LLC and ZDG consented to Carnation’s
usage of the Mark, not that A&A LLC or ZDG owned it.
Mayer Dep. Tr. at 121 (“A: [*69] I took it to mean that it
was [a] recognition that we were already doing this, so, I
wasn’t aware that [ZDG and A&A LLC] were granting a
26 It is undisputed that Carnation filed a trademark application
with the PTO for the EZ-ON Mark during the ter n of the
Carnation License Agreement. Mayer Dep. Tr. at 134.
Third, § 5.3 independently establishes that plaintiffs
owned the EZ-ON Mark. It states: “In the event that any
intellectual property falling within the scope of Licensed
Patents, Licensed Trademarks, or Licensed Products is
conceived, reduced to practice, or developed, or a patent
or trademark application is filed for by sublicensee during
the
term
of
this
agreement,
such
additional [*70] intellectual property shall be assigned
to ZDG and deemed included within the scope of the
present [a]greement.” PTX 370 at 5. The phrases
“intellectual property” and “additional intellectual
property” are not capitalized in this provision; they are
thus used in the vernacular, not in the defined sense that
§ 1.9…