french connection ltd v. tpr holdings - fcuk.pdf
TRANSCRIPT
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 1/22
T
JS 44C/SDNY
REV.
4/2014
JUDGEH :
The JS-Wt
pleadings
Judicial
initiating
PLAINTIFFS
FRENCH CONNECTION
LIMITEC
LERSTEIN
CIVIL C O V E R
SH EET
li W
7976
civil
cover
sheet
and the information
contained
herein neither
replace
nor supplement the filing and service of
or
other
papers
as
required by law, except
as
provided by local rules of court . This form,
approved
by th e
Conference ofthe UnitedStates inSeptember 1974, isrequired for use ofthe Clerk ofCourtforthe purpose
tpe civil docket sheet .
DEFENDANTS
TPR HOLDINGS
LLC
O T
0 9 2
ATTORNEYS (FIRM NAME, ADDFlESS, AND TELEPHONE NUMBER
BAKER & MCKENZIELLP, 452 F
FfTH
(212)
AVE.
NEW
YORK, NY
10018
26-4100
ATTORNEYS
(IF KNOWN)
DAVID ZASLOWSKY
CAUSE
OF ACTION(CITETHE U
(DONOTCIT
CIVIL STATUTE UNDER WHICH
YOU
ARE FILING
AND
WRITE A BRIEF STATEMENT
OF
CAUSE)
JURISDICTIONAL STATUTES UNLESS DIVERSITY)
Thisaction involves a federal dji^estion underthe Lanham Act, 15 U.S.C.
1051
et seq., and diversity
jurisdiction
under28
U.S.C.
§ 1332.
rfg, or
one essentially
the same
been
previously filed n
SDNY at
any time? NoZJ/esI—budge Previously
Assigned
| | Dismissed. No [~J Yes Q
If
yes, give date &Case
No.
No 0 Yes •
Has this action, case, or
proceedii
If yes,was thiscase Vol.Q
Invo
ISTHISAN INTERNATIONAL ARBITRATION
PLACEAN[x] INONE BOXONLY
TORTS
NATURE OF SUIT
ACTIONS UNDER STATUTES
INJURY
AIRPLANE
AIRPLANE PRODUCT
LIABILITY
ASSAULT,
LIBELS
J LANDER
FIIDERAL
EMPLOYERS'
LIABILITY
PERSONAL INJURY
[ J367 HEALTHCARE/
PHARMACEUTICAL
PERSONAL
, , 625 DRUG
RELATED
INJURY/PRODUCT LIABILITY
[ ] 365 PERSONAL INJURY
PRODUCT LIABILITY , , RQn nTHFR
[ ]
368 ASBESTOS
PERSONAL ' ' 69°
0THER
INJURY PRODUCT
LIABILITY
PERSONALPROPERTY
[ ] 370 OTHER FRAUD
[ ]371 TRUTH IN LENDING
FORFEITURE/PENALTY
BANKRUPTCY
[ ]422 APPEAL
28 US C
15 8
[ ) 423 WITHDRAWAL
28 USC 15 7
I
1110
[ ]120
11130
[
1140
I
1150
I ] 1 51
[ ] 1 52
[
]153
[
]160
[ ]190
[ ]195
[ ]196
INSURANCE
MARINE
MILLER ACT
NEGOTIABLE
INSTRUMENT
RECOVERY
OF
OVERPAYMENT &
ENFORCEMENT
OF JUDGMENT
MEDICARE ACT
RECOVERY
OF
DEFAULTED
STUDENT LOANS
(EXCL VETERANS)
RECOVERY
OF
OVERPAYMENT
OF VETERAN'S
BENEFITS
STOCKHOLDERS
SUITS
OTHER
CONTRACT
CONTRACT
PRODUCT
LIABILITY
FRANCHISE
3 4 0M\ 3 INE
3 4 5M ^ I N
36 0
36 2 P
M
E
PRODUCT
LIABILITY
MDTOR
VEHICLE
MDTOR
VEHICLE
F RODUCT
LIABILITY
OTHER PERSONAL
INJURY
RSONAL INJURY -
ED
MALPRACTICE
UNDER STATUTES
IT S
ACTIONS
CIVIL
RIG
[ ]440 OTHER CIVILRIGHTS
i
Non-Prisoner)
)441 VCTING
[ ) 442 EMPLOYMENT
\ i
443 HCUSING/
ACCOMMODATIONS
[ ] 445AMERICANS WITH
SABILITIES-
k/IPLOYMENT
[ ]
446
AMERICANS WITH
SABILITIES
-OTHER
[ ]448 t0UCATION
REAL
PROPERTY
[
1210
[ J
220
[ J 230
[
]240
[ ]245
[ ]290
LAND
CONDEMNATION
FORECLOSURE
RENT LEASE &
EJECTMENT
TORTS
TO LAND
TORT
PRODUCT
LIABILITY
ALL
OTHER
REAL PROPERTY
Checkif
em n e
in complai
i f:
CHECK IFTHIS IS
ACLA B
ACTION
UNDER
F.R.C.P . 23
[ ] 380 OTHER PERSONAL
PROPERTY
DAMAGE
[ ] 385 PROPERTY DAMAGE
PRODUCT LIABILITY
PRISONERPETITIONS
[ ] 463 ALIEN DETAINEE
[ ) 510 MOTIONSTO
VACATE SENTENCE
28
US C
2255
[ J530 HABEAS CORPUS
[ ] 635 DEATH PENALTY
[ ] 5 40 MANDAMUS &OTHER
PRISONER CIVIL RIGHTS
[ ] 550 CIVILRIGHTS
[ ] 555 PRISON CONDITION
[ ] 560 CIVILDETAINEE
CONDITIONS OF CONFINEMENT
SEIZURE OF PROPERTY
21 U SC 8 81
LABOR
[ ] 710 FAIRLABOR
STANDARDS ACT
[ ] 720 LABOR/MGMT
RELATIONS
[ ] 7 40
RAILWAY
LABORACT
[ ] 751
FAMILY MEDICAL
LEAVE ACT (FMLA)
[ ]790 OTHER LABOR
LITIGATION
[ ]791 EMPLRET INC
PROPERTY RIGHTS
[ ] 820 COPYRIGHTS
[ ] 830 PATENT
fc] 840 TRADEMARK
SOCIAL
SECURITY
[ ]861 HIA(1395ff)
[ ] 862 BLACKLUNG(923)
[ ] 863 DIWC/DIWW (405(g))
[ ]864 SSID TITLEXVI
[ ] 865 RSI (405(g) )
FEDERAL
TAX SUITS
[ ] 870 TAXES (U.S. Plaintiffor
Defendant)
[ ]871 IRS-THIRD PARTY
26 US C 7609
SECURITY ACT(ERISA)
IMMIGRATION
[ ] 462 NATURALIZATION
APPLICATION
[ ]465 OTHER
IMMIGRATION
ACTIONS
OTHER STATUTES
I I 375 FALSE CLAIMS
[ ]400 STATE
REAPPORTIONMENT
[ ] 410 ANTITRUST
[ ]430 BANKS&
BANKING
[ ] 450 COMMERCE
[ J460 DEPORTATION
[ ] 470 RACKETEER INFLU
ENCED & CORRUPT
ORGANIZATION ACT
(RICO)
( ] 480 CONSUMER CREDIT
[ ]490 CABLE/SATELLITET
[ ] 850 SECURITIES/
COMMODITIES/
EXCHANGE
] 890 OTHER STATUTORY
ACTIONS
J 891 AGRICULTURALACT
] 893 ENVIRONMENTAL
MATTERS
] 895 FREEDOM OF
INFORMATION ACT
] 896 ARBITRATION
) 899 ADMINISTRATIVE
PROCEDURE
ACT/REVIEW
APPEAL
OF
AGENCY DEC
[ ] 9 50 CONSTITUTIONALIT
STATE STATUTES
•
DEMAND
$
OTHER
DO YOU CLAIM THIS CASE IS RELATED TO A CIVILCASE NOW PENDING INS.D.N.Y.?
JUDGE DOCKET NUMBER
n theck YES
onlyifdemandedincompl:
JURY DEMAND:
DYES
lxjN
NOTE: You must also submit at the time offilingthe
Statement
of Relatedness form (Form IH
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 2/22
PLACE AN x INONEBOXONLY
S 1 Original • 2
Proceeding state
| | 3.
all
paft
Remo
/isd from
Court
:ies
represented
O RI G I N
D 3
Remanded
D 4 Reinstated or
from
Reopened
Appellate
Cour t
| I 5 Transferred from LJ 6
Multidistrict
(Specify District) Litigation
I I 7 Appeal toDistri
Judge
from
Magistrate Jud
Judgment
I | b.
At Hast
one
party
i
PLACEAN X INONEBOXONLY
• 1 U.S. PLAINTIFF Q2 U
pr o
s e .
BASIS
OF
JURISDICTION
DEFENDANT
[x] 3
FEDERAL QUESTION
• 4
DIVERSITY
(U.S. NOT A PARTY)
IFDIVERSITY INDIC TE
CITIZENSHIP ELOW
TIZENSHIP OF PRINCIPAL PARTIES
(FOR
DIVERSITY
CASES
ONLY)
Plaintiff and on e
box
for
Defendant)Place
an [X]in one box fo
CITIZEN
OF THIS
STATE
CITIZEN OF ANOTHER STATE [ ]
PT F
[ ]1
DE F
[ ]1
[ ]2
CITIZEN OR SUB JECT OF A
FOREIGN COUNTRY
INCORPORATED
or PRINCIPAL PLACE
OF BUSINESS IN
THIS STATE
PLAINTIFF(S)
ADDRESS(ES)
f NDCOUNTY(IES)
LIMITED
RENCH CONNECTION
20-22 BED FORD ROW
LONDON
WC1R4 JS
ENGLAND
DEFENDANT(S)
ADDRESS(E ) AND
COUNTY(IES)
TPR HOLDINGS LLC
950 THIRD AVENUE
3RD
FLR
NEW YORK, NEW YORK, 10022
PT F DE F
M 3 [ ] 3
[ ] 4 [
*4
INCORPORATED an d
PRINCIPAL
PLACE
OF BUSINESS
IN
ANOTHER STATE
FOREIGN NATION
PT F DE F
I ]5 [ ]5
[ ]6 [ ]6
DEFENDANT(S) ADDRESS
REPRESENTATION IS
RESIbENCE
ADDRESSES OF
L
NKNOWN
HEREEY MADETHAT, AT THIS TIME, I HAVE BEEN UNABLE, WITH REASONABLE DILIGENCE, TO ASCERTAIN
THE FOLLOWING DEFENDANTS:
Check one: T HI S A C TI O N
(DO NOT check ei
COMPLAIN
DATE
siq(NA\ru
EiHOULD
BE
ASSIGNED TO: • WHITE PLAINS [x] MANHATTAN
box
if this a
PRISONER
PETITION/PRISONER CIVIL RIGHTS
RECEIPT
#
Magistrate
Judge is to be
Magistrate
Judge
designated bythe Clerk ofthe Court.
MAG. JUDGE FRANCIS
Ruby
J.
Krajick,
Clerk ofC^jjrt by
UNITED
STATES
DISTRICT
(tpURT
(NEW
YORK SOUTHERN)
Deputy Clerk, DATED.
ADMITTED TO PRACTICE
IN
THIS DISTRICT
I NO
M YES (DATE ADMITTED
Mo.Ju'y Yr.
1985 )
Attorney Bar Code # DZ-5182
is so
Designated.
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 3/22
JU GE HELLERSTEIfil
David Zaslowsky
BAKER & McKEjNfelE LLP
Attorneys for Plaimiff
French Connection Limited
452 F if th Avenue
New York, New Yckk 10018
Tel: (212)
626-4100
UN ITED STATES
SOUTHERN DISTRICT
French Connec tion
-aga:
TPR
Holdings LLC
DISTRICT
COURT
OF NEW YORK
Limited,
Plaintiff,
hst-
(f/k/a Zirh Holdings LLC),
Defendant.
15 7976
CASE
NUMBER:
COMPLA INT
Plaintiff French Connection Limited (hereinafter Plaintiff or French Connection ), by
. McKenzie LLP, for its complaint against Defendant TPR Holdings LLC
Defendant
or TPR ), alleges as follows: , Z
its attorneys Baker
(hereinafter
1.
French
Wales
wi th
2. Upon
of
New York
York, NY
1
3. The c ou rt
U.S.C.
§§ 1
L anh am A c
pursuant
to
Connection is a corporation organized and existing under the laws ofEngland and
is principal place
of
business in London, England,
information andbelief, TPR is a corporation organized and existing underthe laws
and has its principal place of business at 950 Third Avenue, 3rd Floor,
New
0022.
h is
original jurisdiction over the subject matter of this action pursuant to 28
3^31 and 1338(a) as this action involves a federal
question
pursuant to the
15 U.S.C. 1051 et seq. This court also has jurisdiction over the claims
M U.S.C. § 1332, diversity
of
citizenship, and 28 U.S.C. § 1367, the amount
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 4/22
in controversy
and a
ci t izen
4. TPR resides
the
License
accordance
exclusive
B ac k ground
5. French Connection
appealed to
6.
French
Connect ion
7.
French
FCUK
production
8.
French
exceeding $75,000 and Defendant and Plaintiff being a citizen of a State
of a foreign state, respectively.
in this district. Venue is proper under 28 U.S.C. §
1391
and Section 17.2 of
which expressly provides that it shall be subject to and interpreted in
ddtli New York law, and the Parties consent to and subject themselves to the
jurisdiction of the federal courts within New York.
was founded in 1972 to create well-designed, stylish clothing that
broad
market .
Con; lect ion
on has since worked hard to build on that vision and as a result, French
synonymous with fashion and style.
is the registered proprietor of the FRENCH CONNECTION and
(the Licensed Marks ) and brand names and is engaged in the design,
distribution
of
branded fashion clothing.
ion's long history of success has been based on design quality and
fashion, supportedby a strong market presence resulting in one of the most
and respected clothing brands in the UK and across the world,
has retail stores in various countries around the world selling clothing
products,
^cognizedFRENCH CONNECTION and FCUKbrandshave been extended
into complementary licensed products including men's and women's
fragrances, shoes, watches, handbags, jewelry, and eyewear which together
ial license royalty income.
Connect ion
t rademarks
end
Connection';
innovative
highly recognized
9. French Conihbction
and complementary
10. Its globally
successfully
toiletries
and
generate sub stantial
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 5/22
11. These comp
mortar
retai
12. Upon information
products industry
opportunities
13.
Upon
information
cosmetics
14. Upon information
Licensed Mkk-ks
ementary products are sold pursuant to license agreements in brick-and-
stores and online shops by licensees, with approval
of
French Connection,
and belief, TPR is a NYC based investor and operator in the consumer
TPR's target investments include scalable mass and prestige
in the health, beauty and wellness categories.
and belief, TPR creates, develops, sells and distributes fragrance and
pf(>ducts.
and belief, TPR became interested in obtaining rights to use the
The License Agreement
15. French Connection and TPR entered into a written license agreement dated April 28,
Mcense )1 under which
French
Connection
licensed
certain of its intellectual
PR in exchange for royalty payments as well as other promises,
acknowledged in the License tha t the Licensed Marks were famous and valuable
associated with substantial goodwill in connection with various products.
acknowledges that the Licensed Marks are registered trademarks in the
classes identified in a Schedule A thereto, which makes up part of the
2010 (the
property to
16. TPR
and
17. The
License
t e r r i to r i es
License.
and
18.
Under
the
Ljibense, TPR obtained
the
right to use the FRENCH CONNECTION
mark
in
Canada and to use the FCUK mark throughout the world, with the exception
Kingdom and Republic of Ireland.
at its own expense, to develop, manufacture or assemble, sell, market,
a<|ifvertise and promote the Licensed Products. See Section 6.2, License.
the U S
and
o f
t he Unit ed
19. TPR agreed
distribute,
A copy of the License is annexed
hereto
as
Exhibi t
A.
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 6/22
£
0.
TPR
also aj
high quality
and o f such
ifeed to
perform its duties
and
obligations
to
develop Licensed Products
ofa
that are at least comparable to similar items offered at comparable prices,
^tyle,
appearance
and distinctiveness so asto
protect
and enhance, and in
no
adversely upon, the prestige
of
[Plaintiff] and the Licensed Marks and the
peftaining thereto. See Section 6.2(a), License.
Connection previouslycontractedwith a separate company to grant an exclusive
fr
United
Kingdom and Republic
of
Ireland for
the
creation,
development,
sale and distribution of the certain products listed in a Schedule B to the
manner ref lect
goodwill
21. French
l ic en se f or
manufacture
License.
22. TPR was made aware of this previous license as it is expressed in the License itself, and
through communications with French Connection.
Defendant s Breaches o f the License
23 . Section 9.1
The
due
particular
24. At th e t ime
payment foi
That royalty
25. TPR
has
(which was
26.
O f
th e 2 0
ro
27. Se ct io n 17
28. Under Sect idn
qfthe License provides for quarterly royalty payments of 4.5% of net sales.
for the royalty payments are within 30 days
of
the completion
of
the
(July 31, October 31, January 31
and
April 30).
the License terminated, TPR had failed to pay the last quarterly royalty
the Quarter ending January 2015 (that had been due as of March 2, 2015).
payment has sti ll not been made.
to pay the royalty for the final quarter of the License ending April 2015
iue by May 30, 2015),
yalty payments, 18 were not paid within the time provided for in the License,
of the License states that, Time is of the essence under this Agreement.
8.5(c) of the License, TPR agreed to pay an advertising fee of one percent
dates
quarter
failed
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 7/22
o f net
sales.
29.
Wi th o ne
30. TPR
has
fat
2015 .
31. Section 11.1
specified the}
32. Under
Section
by TPR's
French
33. TPR
never
34.
TPR
never
Sect ion
11.1
exception, TPR failed to pay the advertising fee on time.
ed and refused to pay the advertising fee for the period ending April 28,
of
the License Agreement required TPR to provide quarterly statements and
information
to
be i nc luded i n such statements.
11.1, such quarterly statements were to be signed and certified as accurate
financial officer, or by another officer or official
of
TPR approved by
Conihbction in advance in writing (an Authorized Officer ).
submitted aquarterly statement certified by
its
CFO or
an
Authorized
Officer,
submitted a quarterly statement with all
of
the information required under
ch ief
35.
Section
11
a tt ached a t
each
calendii
of
the License required
TPR
complete the Monthly Reports Form as
Schedule F and deliver the same to Licensor within ten
(10) days
ofthe
end
of
month.
36.
TPR
never submitted a monthly report form in the form attached as Schedule F.
37. With respect to the monthly report forms TPR did submit, 55 out of 60 were not
submitted within the 10-day period required by the License. The report for May 2010
was submitted more than one year late.
38. Section 11.3 of
the License provides in part as follows:
At least once
Licensor 's
signed and
public accountant
reputable independ
the Quarterly
t h at s u ch s ta temen ts
o f
the
Licensor
during each Annual Period, not later than 90 days after the end of
fiscal
year, Licensee shall deliver
to
Licensor: (a)
a
statement,
certified by Licensee's then regularly engaged independent certified
(or,
if
Licensee
has
no such regular engagement, by a
ent certified public accountant), stating that it has examined
Statements submitted by Licensor during the prior fiscal year and
accurately reflect the information in the financial records
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 8/22
39.
TPR never submitted
th e statement refer red to
in Sec tion
11.3
40.
Section 7
Licensee
• <
p) of the License says that Prior to the opening of each selling season,
Licensor
shall
meet
a t L icensor' s
office in L on do n where
Licensee wil l
nd
present
41.
TPR
did not
less did it
Licensor
with
a
plan
of
distribution
consistent
with Section 7.2(a) hereof.
present distribution plans prior to the opening
of
each selling season, much
so at
French
Connection's London office.
o
42. Sect ion 8.6
marketing/plr^mot
Period
on or
Period.
cf the License says that Licensee shall prepare and submit to the Licensor a
ion plan (the Marketing/Promotion Plan ) for each successive Annual
before the commencement
of
the last Quarterly Period
of
the current Annual
43. TPR did
first.
n o t
44.
The
License
indirectly thifou
License
as
Kingdom
arid
45. During the
widely avai
on
the IntenkH
submit a Marketing/Promotion Plan in each year
of
the License after the
provides that Licensed Products shall be distributed by
TPR
(directly or
gh its distributors) only in the Territory, defined in Section 1.21 of the
in respect
of
the 'FCUK' Licensed Mark, the world excluding the United
Republic of Ireland.
tferm
of
the License, and currently, FCUK Licensed Products are presently
able throughout the United
Kingdom
both at br ick and mor tar retailers and
46.
In
or
abou t
retailers a t
Kingdom, i
The Perfumlci
November 2014,
FCUK
Licensed Products were purchased from different
locations in London, Manchester, Newcastle and Birmingham, United
including Argos (a national low-end home and general merchandise retailer),
Shop
(a nat ional discount perfume retailer) , Savers (a national discount
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 9/22
chain
sellini
department
47. TPR is
Kingdom
48. Upon
th e
License
49. Section 2.5(
to
Licensee
restriction
Ireland
50. Upon i
European
L
License
g household goods and health and grooming products), TJ Hughes (a discount
store) and Wilkinson (a regional low-end hardware and home goods store),
awate of the availability of Licensed Products for sale throughout the United
information and belief, TPR and/or its distributors is, and throughout the term of
Has
been, actively selling Licensed Products in the United Kingdom.
c) of the License states that any 'FCUK Licensed Products' sold by Licensee
distributors outside the European Union will be sold subject to a contractual
prohibiting
the
importation
into the United Kingdom and the Republic
of
(emphasis added).
information and belief,
TPR sold
Licensed
Products
to
dis tr ibutors outside the
iiion without the contractual restriction required by Section 2.5(c)
of
the
51. Section 7.2(a) of the License set forth certain criteria for the retail stores into which the
Licensed Product s cou ld
be
sold.
52. Upon
Products
i
53. Section 7.2
contractual
Licensed
54.
Upon
info:
contractual
55. Section
11
Licensee,
infonbation and belief, TPR sold, and permitted its distributors to sell, Licensed
stores that did not meet the requirements
of
Section 7.2(a)
of
the License,
(a) of the License includes the following provision: Licensee shall impose
restrictions on its distributor(s) preventing them from distributing the
Products to any retail store or outlet that does not meet the Criteria.
a tion and belief, TPR sold Licensed Products to distributors without the
bstriction required by Section 2.5(c)
of
the License,
(a) of the license provides:
it
its sole cost and expense, shall prepare and maintain, in
in to
•n i l
•<
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 10/22
accordance
complete
a llow accountan ts
l imita t ion
books o f
Agreement,
under
this All
withgenerally acceptedaccountingprinciples consistently applied,
accurate books and records, in such manner and detail as will
to perform an audit (specifically including, without
originals or copies
of
documents and supporting entries in the
t) covering all transactions arising out
of
or relating to this
^nd to monitor compliance
by
Licensee
with all
of
its
obligations
r e em en t .
arid
the
a c coun
It also granted
records to
c<bhfirm
56.
In
the first
pursuant
to
TPR failed
conduct
a
57. TPR reg
contractual
58. French
under t he
French Connection the right to have an independent auditor review TPR's
compliance with the License.
duarter of 2014, French Connect ion retained KPMG to conduct an audit
section 11.4(a) of the License. In breach of its obligations under the License,
and refused to provide KPMG with the records necessary for KPMG to
fiill
and
complete
audit.
ulajrjly made commitments to
French
Connection that it would
perform
its
Obligations
by certain dates and then didnot abide by those commitments.
Correction was repeatedly required to chaseafterTPRto submitreports required
License and to pay its obligations under the License.
COUNT
I—DECLARATORY
JUDGMENT
59. French
Comection
re-alleges each
of
the foregoing paragraphs as though fully set forth
herein.
60. Section
5.1 of the License defines the Term
of
the agreement as a five-year period
on April 28, 2010, and terminating on the fifth anniversary thereof,
provides,
in
relevant part, that
the License shall be renewed for
a
further
period
of fiv|c| (5)
years
at
the
expiration of the
Term subject
to the following conditions:
commencing
61.
Section
5.2
5.2.2 The Licensee has not committed any material breach or persistent
breaches
of
this Agreement
at
any time during
the
Term;
5.2.3 The Licensee has performed its obligations under this Agreement to the
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 11/22
reasonable
62. By letter
63.
By
letter
described
because
Connect ion
satisfaction o f the Licensor ,
dawd January 20, 2015, TPR sought to renew the License.
dotted January 22, 2015, French Connection rejected the renewal because, as
ab
4)ve, TPR had committedmaterial and persistentbreaches of the License and
did not perform under the License to the reasonable satisfaction of French
PR
64.
The conduc ;
described above constitutes material and persistent breaches of the License
by TPR.
65. Because
of tijie
performance
66 .
Because of ih e
conduct
described above, French Connection
was not satisfied
with TPR's
of
its obligations
under
the License,
conduct described above,
TPR
did not have the right to renew the License
for
a further live-year
term.
67. On March 1'3, 2015,
French
Connection's counsel wrote to TPR and stated, inter alia:
It is FC s
i tself
as
harm
to
FC
relief
will
terminates
know that,
of the Licensb
understanding that, as
of
April
29,
2015,
TPR intends to conduct
License has been renewed. Such conduct will cause irreparable
and FC plans to go to court to enjoin such conduct. Injunctive
, however, be necessary
if
TPR acknowledges that the License
April 28, 2015. Such acknowledgement will allow the parties to
of April 29, they are operating under the provisions of Section 13
i f trie
n o t
on
s
Please
let us
TPR
in tends
been
terminated
that TPR do
will h av e n o
68. As stated in
rights if
TPIJ.
69.
TPR
know by the close of business on Monday, March 23 whether
to
conduct
itself on and after April 29 as
if
the License has not
. If we do not hear from you by then, we will have to assume
s not accept that the License will terminate on April 28, 2015 and
cho ic e bu t
to s ee k
court intervention.
the letter, French Connection was prepared to go into court to protect its
did not agree that the License would terminate effective April 28, 2015.
responiflpd in a letter fromits lawyersdated March24, 2015. While reserving TPR's
rights
to seek)
damages,
importantly,
TPR's lawyers stated:
Beginning en April 29, 2015 TPR intends to conduct i tself as
if
the License
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 12/22
has been tejrfminated
License),
injunctive ri
(expressly reserving its rights pursuant to § 13 of the
Accordingly, there will be no conceivable reason for FC to seek
ief.
Based on th s clear statement from TPR, French Connection did not seek injunctive relief
in April 201
70 .
Consis tent
with
wrote to TPR
TPR
that, goto
by the termination
71.
Rather, upoji
as i f th e LSbense
corresponded
the process
the right to
72. The License
o f
the expiration
of
the License, on April 29, 2015, French Connection
, reminded TPR that the License had expired on April 28, and reminded
g forward, the parties' respective rights and obligations would be governed
ion provisions in Section 13of the License. TPR did not object,
information and belief, for about five months, TPR indeed conducted
itself
had been terminated. For example, TPR and French Connection
with regard to
TPR's
schedule
of
Inventory in its possession, control or in
manufacture, because Section 13 of the License gave French Connection
ase such Inventory,
provided that TPR could sell Inventory not purchased by French Connection
3.4 made clear that such sales shall be made only with the prior approval
of
]
five months
of
acting consistently with the License having been terminated,
18, 2015,
TPR
wrote to French Connection and stated, We never agreed
is terminated. (In fact we believe our option is valid, has been exercised
to hold the rights for the next 5 years),
2, 2015, French Connection
learned that
TPR had so ld 402 ,000 wort h
of
goods without ever seeking,
much
less obtaining, French
c o n s e n t .
purch
bu t Section
[French Coiiiiection
73.
Af te r a lmos ;
on September
that t he lic e is e
and we contihue
74. On Octobe r
French Co
Tnection
Connect ion '
3
75.
On
or
about
October
2,
2015, TPR informed one of
it s
customers
that
it
would
soon
have
10
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 13/22
available for
76.
By
reason
Connect ion
pursuant to
sale additional products with the Licensed Marks.
bf the foregoing, a
real and
actual controversy exists
between
French
and TPR, and French Connection is entitled to a declaratory judgment,
28U.S.C. § 2201, that the License expired on April 28, 2015.
OUNT II— RE CH O F O NT R T ROY LTIES
ND
DVERTISING
77. French Connection re-alleges each
of
the foregoing paragraphs
as
though fully set
forth
herein.
is a binding and enforceable contract between TPR and French Connection.
ion has performed all of the conditions, covenants, and promises required
r fo rmed i n accordance w it h t he
terms
and condi tions
o f the License .
78. The License
79. FrenchConnection
by it to be p =
80. TPR breachdd the License by failing to make all royalty payments required under Section
9 o f
t h e L i cen se .
81. TPR breached
Section 8.5(
82 . Section 8.5
on
advertisi^]
following
TPR
was
required
the
License
the License by failing to make all advertising payments required under
) of the License.
^fthe
License
required TPR to spend, each
year,
specified minimum amounts
g, sales and promotion. Shortfalls in any given year were to be spent in the
as
an
additional
amount.
If
there
was a shortfall at the end of the License,
to pay that amount to French Connection within 30 days of the end of
yea r
83. At
the end
sales and
by failing to
84. French Connection
:}f the
License, there
was a shortfall in the minimum spend on advertising,
promotion in an amount in excess of 964,000. TPRhas breached the
License
pay this amount.
has been damaged by TPR's failure to pay its obligations under the
11
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 14/22
License.
85. French
herein.
COUNT
I I I—BREACH O F CONTRACT
Connection re-alleges each of the foregoing paragraphs as though
fully
set forth
86. Under the License, TPR was obligated to pay 5.5 percent of net sales in royalty and
advertising payments
87. Upon
information
December
31 ,
201
damaging French Connection
88. Under Sect ibn
Produc ts f rom TPR
89. During the
90. Upon
provided for in the
Connection such higher prices
93. A purpose
conf irmat ion from
o f
and belief, the amount that TPR reported as due for the period through
was less than what was owed under the terms
of
the License, thereby
3.1
of
the License, French Connection had the right to purchase Licensed
kt
a price to be determined as set forth in the License.
License term, French Connection purchased Licensed Product from TPR.
infonriation and belief, TPR charged French Connection
a
price higher than that
License. French Connection has been damaged by TPR's charging French
COUNT
I V—BREACH OF
CONTRACT
REPORTS
91. French Comection re-alleges each of the foregoing paragraphs as though fully set forth
herein.
92.TPR breacr̂ d the License by failing to deliver Quarterly Statements and annual
s t a t emen t s .
these reports was to permit French Connection to obtain independent
PR's outside accountants that the amounts TPR was paying in royalties were
12
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 15/22
t he co rr ec t amount s
owed
under
the
License.
94.Because TPR. did not submit such reports, FrenchConnection lost the benefit of this part
of its bargain andd^esnotknow whether TPRhas underpaid under the License.
95. French
herein.
COUNT V—PAYMENT OF INTEREST
Connection re-alleges each of the foregoing paragraphs as though
fully
set forth
96. Under Sectipn 9.5 of the License, TPR agreed that any royalty payments which are due
thb date due he re und er shall
accrue interes t
at a
rate of one
and
one-half
nd not paid on
percent (1
1/2%) mbjnthly
97 .
As a resul t
o f
is due at the agreed
on the unpaid balance.
TPR's failure to make timely royalty payments under the License, interest
ikpon
rate from the date each payment was due.
COUNT V I—BREACH OF CONTRACT AUDIT
98. French Comection re-alleges each of the foregoing paragraphs as though fully set forth
herein.
99. Section
11
independent auditoi
of the License provided French Connection with the right to have an
inspect and audit TPR's record. In addition, Section 11.4(b) states:
If, as a
result
otherwise, it
payments tc
been paid
correct and
Section 9.5)
the examina t ion
reimburse
Licensor
incurred
in
deficiency
of any inspection and/or audit of Licensee's books and records or
is determined at any time
and
from time to time that Licensee's
L i cen so r h e reunde r
were less than the amou nt w h ic h
s ho ul d h av e
respect to the audit period, Licensee shall make all payments to
eliminate any such underpayments (including interest payable under
within ten (10) days after receipt of notice by Licensor. In addition,
if
reveal s an underpayment of 5% or more then Licensee shall
for all cost s
and
expenses
of
Licensor and its representatives
connection with any inspection and/or audit pursuant to
which
the
discovered by Licensor.
with
w s
13
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 16/22
100.
KPMG's findings
contractually oblig
101.
TPRI
result.
102.
forth
herein.
103.
In Jtine 2015, French Connection retained KPMG to conduct such an audit,
ejxceed
the 5% threshold
defined
in
the License. Accordingly, TPR
is
aied
to
bear
thecost of
these procedures,
has failed to pay these costs and French Connection has been damaged as a
The
COUNT
V I I—BREACH
O F
CONTRACT -
SECTION 13
Frenlcjh
Connection re-alleges eachof the foregoing paragraphs as though
fully
set
License is a valid, binding and enforceable contract between French
Connec tion and TPX.
104.
105.
106.
Sect:
on 13
of
the License sets forth the rights and obligations
of
the parties upon
termination
of
the License,which occurred on April 28, 2015.
Frenqh Connection has performed all
of
its obligations under the License.
has breached the License by failing or refusing to perform its obligations
ite TPR's abili ty to fully perform under the License,
failure and refusal to perform its obligations under Section 13 of the
<bf
the terms
of
the License and deprives French Connection
of
the benefit
of
: n the
License.
TPR
under
Section 13,
107.
TPRf
License is a
breach
dospi
the
t e rms con ta ined
108.
t he L i cen se .
109.
French Connection has no adequate remedy at law with regard to Section 13 of
Frenph Connection requests that this Court enter an order requiring TPR to
its obligations under Section 13 of the License.
pecifically perform
14
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 17/22
112.
The
113. The
Office, Registration
114.
The
COUNT V II I— L ANHAM AC T V IOLAT IONS
110. French Connection re-alleges each of the foregoing paragraphs as though fully set
fo rth here in.
111. In claiming
that
the
License
has been renewed and continuing to
manufacture
and
sell Licensed Products,
TPR has
admit ted tha t it plans to use French Connection's Licensed
Marks wi thout Frenlcth Connection's consent.
icensed Marks are both valid and legally protectable.
CUK
mark is registered with the United States Patent and Trademark
No.
3028227.
French Connection mark is registered with the United States Patent and
]Registration
No.
3293682.
Frenldh
Connect ion owns the FCUK and French Connec ti on marks.
Trademark Office, $
115.
116.
TPR
s use of the Licensed Marks to identify goods without French Connection's
l ikel ihood
o f
confusion.
onsent
will
cause i.
117.
118.
products.
119.
TPR
The
TPRf^ sales and advertisement of products bearing the Licensed Marks after
License are directly competing with French Connection's products bearing the
xpiration of the
same marks.
120.
121.
TPRl
A s
is presently using the Licensed Marks in commerce, in the sale and
advertisement of French Connection's products.
broducts
TPR
sells
and
adver ti ses a re ident ical to French Connection's
is infringing the Licensed Marks, as the License expired on April 28, 2015.
result of TPR's persistent and material breaches of the License, French
15
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 18/22
Connect ion is likelv
122. TPRJ'k
wrongful
use
of
the Licensed Marks comprises
an infringement
of
the
Marks and is likely to cause confusion, mistake and deception to the public
origin of the goods, causing irreparable harm to French Connection for
aclbquate remedy at law.
reason of the foregoing acts, TPR is l iable to French Connection for trademark
15U.S.C. § 1114.
's use of the Licensed Marks to promote, market or sell products in
rench Connection constitutes unfair competition pursuant to 15 U.S.C.
ubfair competition is causing irreparable harm to French Connection for which
remedy at law.
PRA YE R FOR
REL IEF
F r ench Connec ti on
to succeed on t he meri ts o f its claims for
breach
o f
contract.
as to the identity
wh i ch t he re is
no
and
123. By
infringement under
124.
TPRf
competition with
§ 1125(a). TPR's
there is no adequati
WHEREFORE, Plaintiff French Connection seeks relief and
demands
judgment against
follows:efendant
TPR
as
1.
2
3. On Cbunt III, damages in an amount to be determined at trial.
4. On Count IV, an Order requiring TPR to deliver to French Connection,
a. for each Quarterly Period under the License, the quarterly statement required
under
Section
11.1 of
the License; and
b. for
ejich
Annual
Period under the License, in accordance with Section 11.3 of the
License, a statement, signed and certified by TPR's regularly engaged
On
Count I, a Declaration that the License expired as ofApril 28, 2015.
Count II, damages in an amount to be determined at trial but currently
estimated
to
be in exces s of
1.5 mi ll ion.
On
16
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 19/22
independent certified public accountant (or, if TPR has no such regular
agement, by a reputable independent certified public accountant), stating that
examined the Quarterly Statements submitted by TPR during the prior fiscal
knd
that such statements accurately reflect the information in the financial
records of
TPR.
eng
i t
yea r
has
On
Count V, in an amount to be determined at trial equal to 1.5 percent interest
ate payment.
er month for each
7
On Count VI, damages in an amount to be determined at trial.
On
Cbunts VII and VIII, an injunction and order
of
specific performance against
TPR,
as
follows
(wi|t|h
defined terms to be
as
they
are
defined
in
the License):
Enjoining TPR its affiliates, agents, servants, employees, directors,
officers, attorneys, and all other persons in active concert or participation
with TPR from manufacturing or assembling, distributing, selling,
transferring, delivering, advertising, promotion and sourcing of Licensed
Products or componentry bearing a Licensed Mark. Notwithstanding the
foregoing, and subject to the other provisions
of
the Court's Order, current
work-in-process for which raw materials have been received and which
are the subject
of
existing confirmed orders, may be completed and sold
of f in accordance with the terms of the License, but TPR may not place
any new orders with its vendors for Licensed Products.
Enjoining
TPR
its affiliates, agents, servants, employees, directors,
officers, attorneys, and all other persons in active concert or participation
with TPR from transferring, selling, delivering or otherwise disposing any
items in the Inventory list TPR provided to French Connection on July 22,
2015, as well as any other materials, goods, products or other items
bearing either the French Connection or FCUK marks, without first
obtaining from French Connection (in writing) consent to sell or dispose
of such items, goods or products.
All of the rights of TPR to use the Licensed Properties shall terminate
forthwith and shall revert immediately to French Connection and
TPR
no
longer shal l have the right to use the Licensed Properties, or any variation
or simulation
thereof,
and
shall d iscont inue al l
use of
the L icen sed
Properties, and promptly shall transfer to French Connection, at no cost to
French Connection, all registrations, filings and rights (not including
17
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 20/22
inventory) with regard to the applicable Licensed Properties which it may
have possessed at any time including, without limitation, French
Connection Beauty Corp.
French Connection shall have the option to cause
TPR
to immediately
transfer and assign to French Connection, all
of
the rights
of
TPR
to any
and all Fragrances and Packaging Designs developed by or on
behalf of
TPR for the Licensed Products for consideration equal to the unamortized
cost basis to TPR, measured on a
ten
(10)
year
amortization schedule, for
such Fragrances or Packaging Designs. TPR also agrees to use its best
efforts to obtain the consent of any third party required in connection with
any such assignment and to cooperate with French Connection and take
such
other
actions as
may
be reasonably necessary to carry out the terms
of Section 13.5(b) of the License.
All labels, tags, and packaging materials containing Licensed Property that
are not required to complete the aforesaid current work-in-process shall
be, at French Connection's option in its sole discretion, within 10 business
days of the exercise of such option, sent or shipped to French Connection
(at no cost to French Connection) or destroyed, with TPR providing proof
o f such
destruction
t o F re nc h Conne ct io n i n t he
form
o f a sworn
statement
or
certificate.
ft TPR shall deliver to French Connection, within 10 business days, at no
cost to French Connect ion, all i tems such as designs , sketches, patterns,
photographs, advertisements, brochures, forms, and other materials
( Materials ) in its possession relating to or bearing on the Licensed
Products, except such materials acquired by
TPR
for use in Licensed
Products as may be owned by
TPR
as specified in Section 10.1(a) of the
License. From and after the
date
of
t hi s Order , TPR
shall no t
use
or
permit others to use any such items or other Materials, or any variations
thereof.
Unless such dates have already passed, on the last day of each month
during the period defined in Section 13.4 of the License, TPR shall
immediately deliver to French Connection a complete and accurate written
schedule
of
TPR's inventory
of
finished Licensed Products, related work-
in-process then on hand (including uncut piece goods and products and
materials in the process of manufacture), confirmed orders, and all
Packaging Materials, advertising and promotional materials and Business
Materials
or o t he r documen ts or
i tems
that b ear the
Licensed
Marks or
French Connection's name, in TPR's possession or control or in the
process of manufacture for Licensee (collectively, Inventory ). French
Connection thereupon shall have the option ( Inventory Option ),
exercisable by notice in writing delivered to TPR within twenty (20) days
after French Connection's receipt of the complete Inventory schedule, to
18
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 21/22
purchase (directly or through its Affiliates) all or any portion of the
Inventory at a purchase price equal to the lesser of TPR's direct cost as
carr ied
on
it s books o f account
or
the fair marke t value.
With respect to those items on which French Connection has exercised the
Inventory Option in accordance
with
its Notice dated September 14, 2015,
TPR shall (i) deliver forthwith to French Connection or its designee the
Inventory items in its possession, (ii) provide within five (5) business days
the dates on which it plans to deliver the Inventory items not yet in its
possession, such dates to be within sixty (60) days of this Order, and
(iii) with respect to the Inventory that is not yet in TPR's possession,
deliver same to French Connection or its designee on the dates provided in
(ii) above. French Connection shall pay
TPR, at the prices set forth in the
July 22, 2015 spreadsheet listing the Inventory, for the Inventory items it
chooses to purchase within forty-five (45) calendar days following its
receipt thereof, provided that French Connection shall be entitled to
deduct as offset from such purchase price any amounts owed to French
Connection by
TPR
(and/or to direct payment for any part
of
such
Inventory to any supplier of Licensed Products in order to reduce an
outstanding balance due to such supplier from TPR).
If
French Connect ion does not exercise the Inventory Option to purchase
all the Inventory, TPR shall be entitled, for a period of t ime (as agreed to
by the Parties but in no event extending beyond October 28, 2015) (the
Sell-Off Period ), but in no event beyond the Sell-Off Period, to sell and
dispose
of
such
of
the Inventory as French Connection did not elect to
purchase pursuant to the Inventory Option, on a non-exclusive basis. Such
sales shall be made only with the prior approval of French Connection and
conducted in accordance with all of the provisions of the License and this
injunction, including an accounting therefor and the payment of
Percentage Royalties thereon. Such accounting and payment shall be due
within ten (10) calendar days following the end of each month in the Sell-
Off Period. Any items in the Inventory not sold and remaining after the
Sell-Off Period shall be delivered, disposed of or destroyed, in accordance
with French Connection's instructions, without charge to French
Connect ion or
i t s Aff i lia tes.
No later than the end of the Sell-Off Period (as defined in Section 13.4 of
the License), TPR shall promptly cause any entity formed under
Section 10.2(d) , including, without limitation, French Connection Beauty
Corp., to cease all operations and cease using the French Connection
and/or FCUK names .
Subject to the other provisions
of
the Court's Order, TPR shall not deliver
products to any distributor unless it has first provided to French
Connection a copy
of
the contract with said distributor that includes the
19
7/23/2019 French Connection Ltd v. TPR Holdings - FCUK.pdf
http://slidepdf.com/reader/full/french-connection-ltd-v-tpr-holdings-fcukpdf 22/22
8.
9.
Dated:
New
York,
October 9
specific contract restrictions required in Sections 2.5(c) and 7.2(a) of the
License .
Pre-judgment interestas permittedby law.
Suclt other and further reliefas the Court shall deemjust and proper.
New York
2015
Respectfully submitted,
BAKER & McKENZ fE L LP
David Xasloi
452
Fifth Avenue
New
York, NY 10018
Attorneys for Plaintiff
F r ench Connec ti on L im it ed