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Bruce Kirby, Inc. v. Laserperformance Europe Ltd.

United States District Court, D. Connecticut

July 27, 2018

BRUCE KIRBY, INC., et al., Plaintiffs,
v.
LASERPERFORMANCE EUROPE LIMITED, et al., Defendants.

          SUPPLEMENTAL RULING GRANTING IN PART AND DENYING IN PART MOTION FOR SUMMARY JUDGMENT

          Jeffrey Alker Meyer, United States District Judge.

         This case concerns a dispute about contract and intellectual property rights involving the building and sale of the popular “Laser” racing sailboat. Now before me is a motion for summary judgment by defendants LaserPerformance (Europe) Limited (LPE) and Quarter Moon, Inc. (QMI) to dismiss four of the claims alleged by plaintiffs Bruce Kirby and Bruce Kirby, Inc. For the reasons set forth below, I will grant in part and deny in part the motion for summary judgment.

         Background

         The facts of this case are set forth at length in my earlier ruling on the parties' motions for summary judgment. See Bruce Kirby, Inc. v. Laserperformance (Europe) Ltd., 2016 WL 4275576, at *1 (D. Conn. 2016). In 1969, Bruce Kirby designed a small sailboat that became very popular for racing competitions. During the early 1980s, plaintiffs entered into an agreement, called the Head Agreement, with two international sailing bodies-the International Sailing Federation (ISAF, formerly known as the International Yacht Racing Union) and the International Laser Class Association (ILCA)-to regulate the manufacture, sale, and registration of sailboats using the Bruce Kirby sailboat design and sold under the brand name “Laser.” Doc. #219-6 at 2-23 (Head Agreement).

         Plaintiffs also entered into “Builder Agreement” contracts with sailboat manufacturers for them to build the sailboats in conformity with the Head Agreement. The Builder Agreements granted LPE and QMI (as successors to the original parties to the Builder Agreements) a license to manufacture, sell, and market the Kirby-designed Laser sailboat. Docs. #228-11 at 2-26 (1983 Agreement); #228-12 (1989 Agreement). In exchange for this license, LPE and QMI owed plaintiffs royalties in an amount of 2% of the dealer wholesale price.

         Affixed to each Kirby sailboat were two small plaques, which the parties refer to as an “ISAF plaque” and a “builder's plaque.” The ISAF plaque was issued by ILCA to authorized builders and was required for a boat to compete in certain racing events. The ISAF plaque included the Laser name and logo, the International Sailing Federation logo, a unique “hull number” that identified the boat, as well as the phrase “AUTHORISED BY THE INTERNATIONAL SAILING FEDERATION, THE INTERNATIONAL LASER CLASS ASSOCIATION, BRUCE KIRBY INC. & TRADE MARK OWNER.” Doc. #228 at 16. The builder's plaque included the Laser name and logo as well as the phrase “LASER SAILBOAT DESIGNED BY BRUCE KIRBY.” Doc. #228 at 17.[1]

         In 2008, Kirby decided to sell his rights in the Laser boat. He and his company entered into a sales contract with a New Zealand company called Global Sailing Limited (GSL) to receive $2.6 million for all of his interest in the Kirby Sailboat design, including certain intellectual property rights and all rights under agreements entered into between plaintiffs and third parties relating to the Kirby Sailboat. In January 2009, GSL informed LPE and QMI that the rights had been assigned and to send all royalty payments to GSL. See Doc. #228-15. But, citing the lack of documentation to show that plaintiffs had assigned rights to GSL, LPE and QMI continued to send royalties to plaintiffs; when plaintiffs refused to accept the payments, defendants made the payments in escrow. See Docs. #228-16, #228-20, #228-22.

         In May 2010, GSL attempted to terminate the Builder Agreement with LPE. See Doc. #219-5. QMI remained an authorized builder. In 2011, plaintiffs and GSL entered another agreement that purported to revise the parties' relationship in light of the lack of consent by the builders to the plaintiffs' transfer of their rights to GSL. Following entry into that agreement, plaintiffs then purported to terminate the Builder Agreements with QMI and LPE in 2012 on the basis of their non-payment of royalties that plaintiffs claimed were owed under the Builder Agreements. See Docs. #228-24, #228-25, #228-26, #228-27. The terminations advised that QMI and LPE were no longer entitled to obtain plaques for their sailboats. Plaintiffs also provided written notice to ISAF and ILCA of the terminations. Nonetheless, ISAF and the builders continued to issue the plaques and did not discontinue the use of the Bruce Kirby name on plaques until shortly after this lawsuit was filed in 2013.

         In this lawsuit, plaintiffs allege seven causes of action. Doc. #23. Count I alleges a Lanham Act claim for trademark counterfeiting; Count II alleges a Lanham Act claim for trademark infringement; Count III alleges a violation of the Connecticut Unfair Trade Practices Act (CUTPA); Count IV alleges misappropriation of Bruce Kirby's publicity rights; and Counts V, VI, and VII allege contract-related causes of action that were previously dismissed by the Court's prior summary judgment ruling and are not relevant to the instant ruling.

         As I noted in an order granting reconsideration (Doc. #312 at 3-4), my prior summary judgment ruling dismissed Counts I to IV on the basis of a mistaken conclusion that plaintiffs had sold the BRUCE KIRBY® trademark to GSL. Because of that error, I concluded that plaintiffs did not have standing to maintain their non-contract claims as alleged in Counts I to IV. In light of my grant of reconsideration, I now consider on the merits those arguments advanced by defendants for dismissal of Counts I to IV of the amended complaint.

         Discussion

         The principles governing the Court's review of a motion for summary judgment are well established. Summary judgment may be granted only if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). I must view the facts in the light most favorable to the party who opposes the motion for summary judgment and then decide if those facts would be enough-if eventually proved at trial-to allow a reasonable jury to decide the case in favor of the opposing party. See generally Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (per curiam); Pollard v. New York Methodist Hosp., 861 F.3d 374, 378 (2d Cir. 2017).

         Lanham Act (Counts I and II)

         The Lanham Act protects against the counterfeiting or infringement of trademarks. See 15 U.S.C. § 1114(1) (counterfeiting); id. § 1125(a)(1) (infringement); Kelly-Brown v. Winfrey, 717 F.3d 295, 304 (2d Cir. 2013). According to plaintiffs, LPE and QMI engaged in counterfeiting and infringement by continuing to use the Bruce Kirby name on both the builder's plaques and the ISAF plaques even after Kirby had terminated their respective builder agreements. Defendants raise three arguments seeking dismissal of the Lanham Act claims: (1) that LPE is a British company that did not engage in any violation of the Lanham Act inside the United States and that the Lanham Act may not be applied to the extraterritorial conduct of LPE; (2) that a “fair use” defense ...


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