1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COMPLAINT JOHN W. SPIEGEL (SBN: 78935) [email protected]MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue, Thirty-Fifth Floor Los Angeles, CA 90071-1560 Telephone: (213) 683-9100 Facsimile: (213) 687-3702 JONATHAN H. BLAVIN (SBN: 230269) [email protected]MUNGER, TOLLES & OLSON LLP 560 Mission Street, 27th Floor San Francisco, CA 94105 Telephone: (415) 512-4000 Facsimile: (415) 512-4077 Attorneys for Plaintiff EMECO INDUSTRIES, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA EMECO INDUSTRIES, INC. Plaintiff, v. RESTORATION HARDWARE, INC., GARY FRIEDMAN, and DOES 1-10. Defendants. CASE NO. COMPLAINT FOR FEDERAL TRADE DRESS AND TRADEMARK COUNTERFEITING AND INFRINGEMENT; FEDERAL DILUTION; COMMON LAW TRADE DRESS AND TRADEMARK INFRINGEMENT; VIOLATION OF CAL. BUS. & PROF. CODE §§ 14330 et seq.; VIOLATION OF CAL. BUS. & PROF. CODE §§ 17200 et seq. DEMAND FOR JURY TRIAL
Emeco Industries, Inc. by and through its attorneys, brings this Complaint against Defendants Restoration Hardware, Inc., its former Chief Executive Officer and present Chairman Emeritus, Creator and Curator Gary Friedman.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
COMPLAINT
JOHN W. SPIEGEL (SBN: 78935) [email protected] MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue, Thirty-Fifth Floor Los Angeles, CA 90071-1560 Telephone: (213) 683-9100 Facsimile: (213) 687-3702 JONATHAN H. BLAVIN (SBN: 230269) [email protected] MUNGER, TOLLES & OLSON LLP 560 Mission Street, 27th Floor San Francisco, CA 94105 Telephone: (415) 512-4000 Facsimile: (415) 512-4077
Attorneys for Plaintiff EMECO INDUSTRIES, INC.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
EMECO INDUSTRIES, INC.
Plaintiff,
v.
RESTORATION HARDWARE, INC., GARY FRIEDMAN, and DOES 1-10.
Defendants.
CASE NO.
COMPLAINT FOR FEDERAL TRADE DRESS AND TRADEMARK COUNTERFEITING AND INFRINGEMENT; FEDERAL DILUTION; COMMON LAW TRADE DRESS AND TRADEMARK INFRINGEMENT; VIOLATION OF CAL. BUS. & PROF. CODE §§ 14330 et seq.; VIOLATION OF CAL. BUS. & PROF. CODE §§ 17200 et seq.
DEMAND FOR JURY TRIAL
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-1-
COMPLAINT
Plaintiff Emeco Industries, Inc. (“Emeco” or “Plaintiff”), by and through its attorneys,
brings this Complaint against Defendants Restoration Hardware, Inc., its former Chief Executive
Officer and present Chairman Emeritus, Creator and Curator Gary Friedman, and Does 1-10
(collectively, “Restoration Hardware” or “Defendants”) for injunctive relief and damages. Emeco
alleges as follows:
NATURE OF THE ACTION
1. This action arises out of Restoration Hardware’s flagrant and willful infringement
of Emeco’s trade dress and trademark rights in its world-renowned Navy Chair® collection.
Restoration Hardware has developed and is presently selling a series of cheap knockoffs, with the
near-identical “Naval Chair” name, that copy verbatim the iconic and highly distinctive design of
the Navy Chair® product line. Below is a side-by-side comparison of Emeco’s Navy Chair® and
Restoration Hardware’s “Naval Chair.”
Emeco’s Navy Chair® Restoration Hardware’s “Naval Chair”
2. Originally commissioned by the United States Navy during World War II, the
Emeco Navy Chair® is a modern classic of twentieth century design, universally celebrated for
its craftsmanship and sustainable composition. The Navy Chair® is featured in the permanent
collections of modern art museums and is a prominent fixture of homes, offices, colleges, hotels,
and restaurants around the world. Composed of recycled aluminum, the chairs are sculpted and
1
2
3
4
11
19
27
28
5
6
7
8
9
10
12
13
14
15
16
17
18
20
21
22
23
24
25
26
-2-
COMPLAINT
manufactured by hand in Hanover, Pennsylvania through a highly technical and precise system
of 77 steps. As a result of this rigorous process, the Navy Chair® is three times as strong as steel
and is built to last for 150 years. The Navy Chair® is sold at retail for approximately $450.
3. Restoration Hardware’s “Naval Chair” line of chairs and stools are blatant, cheap
knockoffs of the Emeco Navy® product line. By giving its chairs and stools the confusingly
similar “Naval Chair” name and describing them as an “update of an armed forces classic,”
Restoration Hardware misleadingly suggests that, like the Emeco Navy Chair®, its products are
American-made. On information and belief, they are manufactured in China for a fraction of the
cost, and are not the result of the extensive and precise manufacturing process that ensures the
high quality of the Navy Chair® collection. The “Naval Chair” presently sells at retail for $129.
4. Restoration Hardware has stated, euphemistically, that “[a]t our core we are not
designers, rather we are curators and composers of inspired design and experiences.”1 In fact,
Restoration Hardware is not a “curator” or “composer” of others’ “inspired designs”; it is a
counterfeiter of them. In advance of its upcoming IPO, Restoration Hardware’s publicly-
announced revenue-surging strategy is built upon “[e]xternally discover[ing] and curat[ing]”
others’ designs, which decreases production lead times and costs.2 Having been sued for copying
more than half a dozen times in the past decade, Restoration Hardware’s current activities are part
of an established practice of infringing others’ designs and trademarks for financial gain.
5. The irreparable harm caused by Restoration Hardware’s willful and manifest
infringement to Emeco’s reputation and significant goodwill is massive, incomparable to that
caused by a typical, small-time counterfeiter. Restoration Hardware is hijacking and exploiting
Emeco’s brand image and iconic designs. As an established company, consumers are highly
likely to believe that the products Restoration Hardware sells are genuine, legitimate articles, not
cheap counterfeits made overseas. Emeco brings this action to halt that harm and protect its
exclusive rights. Emeco further is entitled to its actual damages, to Restoration Hardware’s illicit
profits, to statutory damages, and/or exemplary damages as a result of this unlawful conduct. 1 http://www.sec.gov/Archives/edgar/data/1528849/000119312512282937/d70987ds1a.htm. 2 Id.
1
2
4
11
16
21
22
26
27
28
3
5
6
7
8
9
10
12
13
14
15
17
18
19
20
23
24
25
-3-
COMPLAINT
THE PARTIES
6. Emeco is a privately held Pennsylvania corporation and has its principal place of
business in Hanover, Pennsylvania.
7. Restoration Hardware is a Delaware corporation and has its principal place of
business in Corte Madera, California. Private equity firms Catterton Partners and Tower Three
Partners LLC, along with Defendant Gary Friedman, bought a controlling equity stake in
Restoration Hardware in a merger agreement approved by shareholders in June 2008. On
September 19, 2012, the company filed plans for an initial public offering in 2013 of up to $150
million in common stock. Restoration Hardware presently has 87 retail and 10 outlet stores
throughout the United States and Canada.
8. Gary Friedman is former Chairman and Chief Executive Officer of Restoration
Hardware. In August 2012, he was appointed Chairman Emeritus, Creator and Curator of
Restoration Hardware. On information and belief, Friedman is the owner of up to 20% of
Restoration Hardware’s equity,3 and is expected to make several million dollars in the upcoming
IPO. He resides in Belvedere, California.
9. Does 1-10 are individual directors, officers, employees and/or investors of
Restoration Hardware who personally directed, controlled, ratified, or otherwise participated in
Restoration Hardware’s infringing and unlawful activity, but whose identities are presently
unknown. Emeco intends to name such individuals after it ascertains their identities through
discovery.
JURISDICTION AND VENUE
10. The Court has subject matter jurisdiction over the Lanham Act causes of action
pleaded herein pursuant to 28 U.S.C. §§ 1331 (federal question) and 15 U.S.C. §§ 1051, et seq.
The Court has supplemental jurisdiction over the state law causes of action pleaded herein
11. Venue is proper in this District because Restoration Hardware resides in the
District and is subject to personal jurisdiction within it, 28 U.S.C. § 1391.
INTRADISTRICT ASSIGNMENT
12. This is an Intellectual Property Action to be assigned on a district-wide basis
pursuant to Civil Local Rule 3-2(c).
FACTUAL ALLEGATIONS
Emeco and Its Iconic Navy Chair® Line of Products
13. Emeco was founded in 1944 in Hanover, Pennsylvania. Commissioned by the
United States Navy during World War II to build a seaworthy, lightweight and durable chair that
could be used on warships and submarines, Emeco developed the iconic Navy Chair® (known as
the “1006 Navy Chair”). The United States government to this day continues to purchase Emeco
Navy Chairs® for United States Navy ships and submarines.
14. In the years since, the Emeco Navy Chair® has been recognized as a modern
masterpiece of twentieth century design. It is in the permanent collections of museums around
the world, including the Design Museum in London and the Carnegie Museum of Art in
Pittsburgh, and is presently on display in the Museum of American History in Washington, D.C.
and a traveling exhibition entitled The Art of Seating: 200 Years of American Design. It is used in
homes, offices, hotels, colleges, and restaurants around the world and regularly appears in design
magazines, fashion layouts, and Hollywood films and television series. The Navy Chair® also
has been prominently displayed by preeminent designers — including Philippe Starck and Frank
Gehry — in their own projects, and such designers also have collaborated with Emeco in their
own furniture designs.
15. The Navy Chair® is constructed by hand in Hanover, one at a time, through a
highly technical and precise manufacturing process consisting of 77 independent steps. The
chairs are subjected to a proprietary thermal treatment, making them three times stronger than
steel. Emeco has approximately 54 workers in Hanover that produce an output of about 1,000
Navy Chairs® per month. Each chair takes approximately two weeks to complete, is expected to
1
2
3
4
10
17
18
19
20
21
22
23
24
25
26
27
28
last for 150 years, and comes with a lifetime guarantee. Emeco Navy Chairs® also pass the most
stringent American National Standards Institute (ANSI) and Business and Institutional Furniture
Manufacturer’s Association (BIFMA) standards.
16. Emeco has an industry-wide reputation for exclusively manufacturing the Navy
Chair® through this rigorous process. The unique Emeco manufacturing process and the Navy
Chair® product line have been featured by several media outlets, including CNN and John
Ratzenberger’s “Made in America” television show. Emeco has extensively advertised and
marketed the Navy Chair® and has sold over 1,000,000 of them, always associating Emeco as the
source of the Navy Chair®.
5
6
7
8
9
17. As part of a Joint Venture Partnership with the Coca-Cola company, Emeco also
constructs a version of the Navy Chair® made out of recycled plastic Coca-Cola bottles (known
as the “111 Navy Chair®”). The production of this chair is expected to keep three million plastic
bottles out of landfills each year (since 2010, 8 million bottles have been keep out of landfills).
The 111 Navy Chair® is available in various colors, including red, black, green, orange, and
white. The 111 Navy Chair® has won several awards, including the Good Design Award and the
International Forum Product Design Award.
11
12
13
14
15
16
18. Below are images of the 1006 Navy Chair® and the 111 Navy Chair®.
1006 Navy Chair® 111 Navy Chair®
-5-
COMPLAINT
1
3
4
5
6
7
8
9
10
11
12
13
14
18
19
21
26
28
19. In addition, Emeco makes a number of other products as part of its Navy Chair®
collection, including the Navy Armchair, the Navy Counter Stool, and the Navy Barstool. 2
The Navy Armchair The Navy Counter Stool The Navy Barstool
15
16
17
20
22
23
24
25
27
-6-
COMPLAINT
20. Emeco sells its Navy Chair® collection directly to consumers, including through
its website, and through established retail furniture and design stores such as Design Within
Reach. Emeco also sells its Navy Chair® products to trade architects and designers,
governments, contract dealers, international distributors, and for end use commercial applications.
Emeco’s Navy Chair® Trade Dress and Trademark Rights
21. Emeco is the owner of the exclusive trade dress and trademark rights in the Navy
Chair® collection.
22. Emeco is the owner of U.S. federal registration nos. 2511360 and 3191187, which
cover the design and outline of the Navy Chair®, respectively. Under these registrations, Emeco
has the exclusive right to use the design and outline of the Navy Chair® in connection with its
furniture and marketing materials. Copies of the certificates for these federal trademark
registrations are attached hereto as Exhibit 1. Both of these trademarks are incontestable.
23. Emeco also is the owner of U.S. federal registration nos. 3016791 and 3912854,
which cover the trademarks “Navy Chair” and “111 Navy Chair.” Under these registrations,
1
2
3
4
7
20
28
5
6
8
9
10
11
12
13
14
15
16
17
18
19
21
22
23
24
25
26
27
-7-
COMPLAINT
Emeco has the exclusive right to use the Navy Chair® trademark. Copies of the certificates for
these federal trademark registrations are attached hereto as Exhibit 2. The “Navy Chair”
trademark is incontestable.
24. Emeco owns statutory and common law rights in the design and trade dress of the
entire Navy Chair® product line, including the Navy Armchair, the Navy Counter Stool, and the
Navy Barstool, as well as their associated Navy Chair® trademarks.
25. The design elements of the Navy Chair® collection together comprise an
inherently distinctive and non-functional aesthetic. This includes, for example, the rounded bends
at the top corners on the upper back of the seat, which also form the back legs; the rounded curves
on the lower back of the seat; the overall concave curvature of the chair back (when viewed from
the back); the number, space, and positioning of the three vertical bars connecting the upper and
lower curves of the back of the seat; the unique, molded seat defined by concave curves meeting
in the center of the seat to form a triangle “butt dip”; the pie-shaped cross section of the tapered
front legs; the two curved horizontal bars running between the corresponding front and back chair
legs in the chair and armchair versions, and for the stool versions, between the two front legs and
two back legs; the positioning and angle of the curved horizontal bar(s) on the lower base of the
seat; the outward bent of the back legs; the lack of fasteners, yielding a sculpture-like, one-piece
design; and the distinct hand brushed finish with the contrasting direction where the leg meets the
seat bottom.
26. Emeco’s use of the Navy Chair® design and trademark has been substantially
continuous and exclusive. Emeco has attained strong name recognition in the Navy Chair®
design and mark, which have come to be associated with Emeco and which identify Emeco as the
source of the Navy Chair® collection. Emeco has spent significant sums marketing and
promoting its products in connection with Navy Chair® design and trademark, and considers
them to be vitally important, valuable assets for the company. Emeco has vigorously and
continuously enforced its Navy Chair® trade dress and trademark rights against infringers and
counterfeiters.
1
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
27. Emeco is so closely associated with the design of the Navy Chair® that it uses the
outline of the chair (federal registration no. 3191187) as the company’s official logo: 2
Restoration Hardware’s Unauthorized Use of Emeco’s Trade Dress and Trademarks
28. Without any authorization from Emeco, Restoration Hardware has replicated the
inherently distinctive trade dress of Emeco’s Navy Chair® product line with a series of cheap
knockoffs, and has used the confusingly similar “Naval Chair” mark in describing these products.
29. Consumers are highly likely to confuse the source, association, affiliation,
endorsement or sponsorship of Restoration Hardware’s “Naval Chair” products with the Emeco
Navy Chair® brand. Consumers who directly purchase the “Naval Chair” products from
Restoration Hardware are likely to think they are the original Emeco Navy Chair® products or
otherwise associated or affiliated with them. Consumers are unlikely to believe that an
established company such as Restoration Hardware would be selling cheap counterfeits made
overseas. Moreover, consumers who do not directly purchase the “Naval Chairs” from
Restoration Hardware but who see them in the world (offices, restaurants, homes, etc.) are highly
likely to confuse them with Emeco’s Navy Chair® collection. Restoration Hardware’s products
further dilute the highly distinctive and famous quality of the Navy Chair® trade dress and mark,
by both blurring and tarnishment.
30. Upon information and belief, in using Emeco’s trade dress and a confusingly
similar name to the Navy Chair® trademark, Restoration Hardware has willfully and deliberately
sought to profit from Emeco’s established goodwill and reputation.
31. On information and belief, the Restoration Hardware “Naval Chair” products are
manufactured in China and are not the result of the extensive and precise manufacturing process
-8-
COMPLAINT
1
2
3
4
5
6
7
8
9
10
13
15
16
17
18
19
20
21
22
23
24
25
26
27
28
that ensures the high quality of the Navy Chair® product line.4 Restoration Hardware does not
disclose to consumers that its chairs and stools are made overseas in its marketing materials; to
the contrary, Restoration Hardware misleadingly suggests that they are manufactured in the
United States by naming them “Naval Chair” and describing them as an “update of an armed
forces classic.” Moreover, a recent Restoration Hardware catalog had on its cover a picture of
Abraham Lincoln’s profile on Mount Rushmore, further suggesting the purportedly American-
made nature of its products. And by describing its products as the “1940s Naval” chair,
Restoration Hardware seeks to capitalize on, and usurp, Emeco’s own unique role in American
history.
32. The “Naval Chair” products sell at retail at prices that are on average $300 less
than their Navy Chair® counterparts. For example, the Navy Chair® sells at retail for
approximately $450.00, and the “Naval Chair” sells for $129.00.
11
12
33. The designs of the Restoration Hardware “Naval Chair” side chair and armchair
versions are virtually identical to that of the Navy Chair® products, as shown below. 14
Navy Chair® “Naval Chair”
-9-
COMPLAINT
4 As Restoration Hardware has stated in its filings with the SEC, approximately 77% of its products are sourced in Asia, the majority of which originate from China. http://www.sec.gov/Archives/edgar/data/1528849/000119312512282937/d70987ds1a.htm.
1
2
3
4
5
6
7
8
9
10
11
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Navy Armchair “Naval” Armchair
34. The designs of the Restoration Hardware “Naval” counter stool and barstool
products are nearly identical to their counterpart Navy Chair® products, as shown below. 12
Navy Counter Stool “Naval” Counter Stool
-10-
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
18
20
23
24
25
26
27
28
Navy Barstool “Naval” Barstool
35. A minor difference between the “Naval Chair” counter stool and barstool and the
Navy Chair® stools is that the latter have a single bar on their lower base, whereas the
Restoration Hardware stools have two bars. On information and belief, this difference is not the
result of Restoration Hardware seeking to modify the Navy Chair® design, but rather because it
had to include the additional bar for support because its chairs are not thermal treated and
therefore lack the strength of the Navy Chair® stools.
13
14
15
16
17
36. Restoration Hardware has prominently marketed and advertised its chairs and
stools with the “Naval Chair” name in its print catalog and on its website. 19
37. Below is in image from the Restoration Hardware fall 2012 catalog. For the last
fiscal year, Restoration Hardware states that it distributed approximately 26.1 million catalogs to
38. Below is an image of the Restoration Hardware website using the “Naval Chair”
name. In 2011, Restoration Hardware’s websites logged over 14.3 million unique visits.6 12
-12-
COMPLAINT
Emeco Sends Restoration Hardware Cease and Desist Notices, and It Responds By Removing “Naval Chair” From Its Website, Admitting a Likelihood of Confusion
39. On September 7, 2012, Gregg Buchbinder, President & CEO of Emeco, had a
telephone conversation with Glenn Krevlin, a member of the board of directors of Restoration
Hardware, in which he expressed his concerns regarding Restoration Hardware’s “Naval Chair”
product line and told him that if Restoration Hardware did not cease its conduct, Emeco would be
forced to bring legal action. Mr. Krevlin responded that Mr. Buchbinder should email him a