Valentino S.p.A. v. Mario Valentino S.p.A. - Complaint
Valentino S.p.A. v. Mario Valentino S.p.A. - Complaint
Valentino S.p.A. v. Mario Valentino S.p.A. - Complaint
1 COMPLAINT
2 Plaintiff Valentino S.p.A. alleges the following for its Complaint against
3 Defendants Mario Valentino S.p.A. and Yarch Capital, LLC:
4 JURISDICTION AND VENUE
5 1. This Court has subject matter jurisdiction over Valentino S.p.A.’s Lanham
6 Act claims (15 U.S.C. § 1125) and design patent claims (35 U.S.C. §§ 281, 289)
7 under 28 U.S.C. § 1338 (acts of Congress related to intellectual property) and 28
8 U.S.C. § 1331 (federal question). This Court has subject matter jurisdiction over
9 Valentino S.p.A.’s state law claims under 28 U.S.C. § 1367 (supplemental
10 jurisdiction).
11 2. Venue is proper in this district pursuant to (i) 28 U.S.C. § 1391(b)(2)
12 because a substantial part of the events or omissions giving rise to the claims
13 occurred in this district, and (ii) 28 U.S.C. § 1391(b)(3) because defendant Yarch
14 Capital, LLC is subject to personal jurisdiction in this district.
15 THE PARTIES
16 3. Plaintiff Valentino S.p.A. (“Valentino”) is an Italian joint stock company
17 with its principal place of business in Milan, Italy.
18 4. Defendant Mario Valentino S.p.A. (“Mario Valentino”) is an Italian joint
19 stock company with its principal place of business in Napoli, Italy.
20 5. Defendant Yarch Capital, LLC (“Yarch”) is a California limited liability
21 company. On information and belief, its principal place of business is in Studio
22 City, California and at least one of its members resides in this district.
23 6. Mario Valentino and Yarch are referred to collectively as the “Mario
24 Valentino Defendants.”
25 PATENTS-IN-SUIT
26 7. On December 17, 2013, the United States Patent and Trademark Office
27 (“USPTO”) duly and legally issued USD695,517 entitled “Handbag” (the “’517
28 Patent”).
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Complaint by Valentino S.p.A.
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Complaint by Valentino S.p.A.
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1 17. Valentino’s handbags are sold throughout the United States at luxury
2 retailers such as Bergdorf Goodman, Neiman Marcus, and Saks Fifth Avenue.
3 Valentino handbags typically retail for $1,000 to $4,000-plus, with exclusive or
4 limited editions selling for over $18,000.
5 18. Valentino’s handbags have been critical to maintaining the value of the
6 legendary Valentino brand into the twenty-first century and have accounted for over
7 $700 million in revenue in the past five years (over $100 million in the United
8 States).
9 Mario Valentino
10 19. Mario Valentino was founded in the 1950s by a shoemaker of the same
11 name. Mario Valentino subsequently expanded into other leather goods, including
12 handbags.
13 20. Mario Valentino’s handbags have not achieved the prestige of Valentino
14 handbags. As an illustration of the discrepancy, Valentino’s handbags command a
15 retail price in the thousands to tens-of-thousands of dollars. Mario Valentino’s
16 handbags, on other hand, can typically be purchased for under $500, and are sold in
17 the United States primarily, if not exclusively, at discount retailers such as Century
18 21, Saks off 5th, and Nordstrom Rack.
19 The Co-Existence Agreement between Valentino and Mario Valentino
20 21. Because of their similar names and overlapping goods, Valentino and
21 Mario Valentino experienced issues of consumer confusion. Thus, in 1979, Mario
22 Valentino, on the one hand, and Valentino and several affiliates of Valentino (the
23 “Valentino Companies”), on the other hand, entered into a co-existence agreement
24 (the “Co-Existence Agreement”). The Co-Existence Agreement is “deemed to
25 extend, without any limitation, to all Countries and to all jurisdictions throughout
26 the entire world.” 1
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The Co-Existence Agreement is written in Italian. Valentino’s allegations translate
28 the Co-Existence Agreement from Italian to English for the Court’s convenience.
These allegations are not intended to control over the original contract language.
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Complaint by Valentino S.p.A.
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1 22. The Co-Existence Agreement states that, by entering into it, “[t]he
2 parties desire to avoid public confusion and conflict, present or future, in any part of
3 the world….” Consistent with that purpose, “[t]he parties agree[d] to see to it that
4 their competitive relations are in line in full with the principles of fair competition.”
5 23. The Co-Existence Agreement states that Mario Valentino had adopted
6 the “trademark ‘MARIO VALENTINO’ in block letters and in the form of a
7 signature, ‘VALENTINO’ in block letters and in the form of a signature, the letters
8 ‘MV’ and the letter ‘V’, in connection with a large variety of merchandise.”
9 24. The Co-Existence Agreement further states that the Valentino
10 Companies had adopted the “trademark ‘VALENTINO’ in block letters,
11 ‘VALENTINO’ in the form of a signature and the letter ‘V’ in connection with a
12 large variety of merchandise.”
13 25. The Co-Existence Agreement describes various restrictions on the
14 parties’ use of their trademarks. In particular, paragraph 3 states:
15 Mario Valentino may use and register the full name Mario Valentino or M.
Valentino or Valentino or the letters MV or V exclusively on the outside,
16 together with Mario Valentino on the inside and on the packaging on all goods
made of leather or imitation leather or other material, such as, but not limited
17 to, … bags, … purses, … travel bags … and specifically any type of goods
falling within class 18 of the International Classification of Goods and
18 Services to which the trademarks are ascribed with the exception of leather
clothing.
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20 26. The Court of Milan recently construed paragraph 3 of the Co-Existence
21 Agreement in a decision dated May 7, 2019. In that proceeding, Valentino argued
22 that paragraph 3 of the Co-Existence Agreement prohibits Mario Valentino from
23 using more than one of the “Mario Valentino,” “M. Valentino,” “Valentino,” “MV,”
24 and “V” marks on the outside of handbags, and requires use of the “Mario
25 Valentino” mark on the inside and packaging of all handbags. For example, Mario
26 Valentino is permitted to use the “V” or “Valentino” mark on the outside of its
27 handbags, but is not permitted to use the “V” and “Valentino” marks together, and
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Complaint by Valentino S.p.A.
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1 must also use the “Mario Valentino” mark on the inside and packaging of all
2 handbags to avoid consumer confusion.
3 27. The Court of Milan agreed with Valentino and ruled (as translated from
4 the original Italian):
5 The interpretation of the above Clause proposed by VALENTINO S.p.A. is
upheld.
6
Indeed, the use in Clause 3 of the conjunction “or” in the list of the various
7 distinctive signs supports, in the case at hand, the alternative use of the
concerned signs, thus excluding the possibility of simultaneous use of two or
8 more of the above-mentioned terms.
9 28. Based on its judgment in favor of Valentino, the Court of Milan
10 enjoined Mario Valentino from further sale of non-compliant handbags:
11 In partially upholding the counterclaim brought by VALENTINO
S.p.A.:
12
-having established that the actions performed by MARIO
13 VALENTINO S.p.A., in relation to the marketing of class 18 products
including more than one of the signs mentioned by Clause 3 of the
14 1979 Agreement on the outside, and the failure to apply on the inside
of said products and on the packaging of the sign Mario Valentino,
15 constitute a breach of the Agreement of 11.5.1979, prohibits the
further continuation of these conducts.
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17 The Mario Valentino Defendants’ Wrongful Conduct
18 29. On information and belief, Yarch is Mario Valentino’s handbag licensee
19 in the United States.
20 30. The Mario Valentino Defendants are actively engaging in a campaign to
21 trade off Valentino’s goodwill in the United States handbag market by selling
22 handbags that (i) violate the terms and purpose of the Co-Existence Agreement,
23 (ii) in many cases, copy the design of Valentino’s bags, and (iii) are advertised and
24 marketed in ways intentionally designed to confuse consumers into believing Mario
25 Valentino handbags are actually Valentino handbags being sold at discount, and/or a
26 diffusion line of Valentino handbags that retails at lower prices.
27 31. For example, the Mario Valentino Defendants are distributing,
28 promoting and selling handbags in the United States that do not comply with the
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Complaint by Valentino S.p.A.
Case 2:19-cv-06306 Document 1 Filed 07/22/19 Page 7 of 20 Page ID #:7
1 Co-Existence Agreement’s requirements that such products not contain both the “V”
2 and “Valentino” marks on the outside:
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Complaint by Valentino S.p.A.
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8 32. The Mario Valentino Defendants market their handbags with packaging
9 and related literature that prominently identifies the bags as coming from
10 “Valentino,” while downplaying or omitting entirely the fact that they are
11 “Valentino” bags licensed by Mario Valentino S.p.A.
12 33. On information and belief, the Mario Valentino Defendants also market
13 their handbags with an identified “market” price that is substantially higher than the
14 price at which the handbags actually are sold, and which is closer to the prices
15 associated with Valentino bags available at higher end luxury retailers. However,
16 on information and belief, Mario Valentino handbags are not actually sold at the
17 stated “market” price, and that information is provided to retailers to be included on
18 price tags in order to create the impression that the handbags really are the more
19 expensive handbags put out by Valentino, now being sold at a discount.
20 34. The Mario Valentino Defendants are selling numerous models of
21 handbags labeled in a manner that is not permitted under the Co-Existence
22 Agreement as determined by the Court of Milan, and which is likely to cause the
23 very type of consumer confusion the Co-Existence Agreement was intended to
24 prevent.
25 35. On information and belief, Yarch’s press release announcing the launch
26 of these bags in the United States was intended to confuse the public into believing
27 the bags were offered by Valentino, instead of Mario Valentino. The press release’s
28 headline states “Valentino Bags Launches in U.S. Market.” The headline did not
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Complaint by Valentino S.p.A.
Case 2:19-cv-06306 Document 1 Filed 07/22/19 Page 9 of 20 Page ID #:9
1 mention Mario Valentino. The press release’s pull-quote states “‘Valentino is one
2 of the top brands in the world,’ said Jeff Yarchever, CEO of Yarch Capital and
3 Valentino Bags. ‘This is a brand new attainable luxury collection with a top
4 designer name that people worldwide are familiar with.’” The reference to “a top
5 designer name that people worldwide are familiar with” is an obvious reference to
6 Valentino. The first sentence of the press release states “[a] new generation of
7 Valentino Bags is now available for a broader range of luxury shoppers ….” The
8 reference to a “new generation” implies that the handbags described in the press
9 release were a continuation of Valentino’s existing line of handbags. Overall, the
10 press release uses “Valentino” 20 times, but “Mario Valentino” only appears twice,
11 including once buried at the bottom of the press release.
12 36. Similarly, the Mario Valentino Defendants’ website contains a series of
13 “Lookbooks” from Spring 2016 to Fall 2018. The earlier Lookbooks prominently
14 displayed “Valentino By Mario Valentino” on their cover, as depicted in the
15 example from Spring 2018 below:
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Complaint by Valentino S.p.A.
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1 37. The Lookbook from Fall 2018, however, does not use “Mario
2 Valentino” on the cover, as pictured below:
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15 38. The word “Mario” also does not appear in any of the glossy pictures
16 within the Fall 2018 Lookbook. Rather, it appears only in a page of text in small
17 black and white font in a book otherwise made up almost entirely of striking color
18 photos. Thus, the Mario Valentino Defendants are intentionally downplaying that
19 their products are Mario Valentino products in order to confuse consumers into
20 believing the products are connected to Valentino.
21 39. Furthermore, as depicted below, in certain instances the packaging of
22 Mario Valentino handbags does not include the words “Mario Valentino.”
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Complaint by Valentino S.p.A.
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Complaint by Valentino S.p.A.
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1 c. “I was trying to find if anyone had intel on the Mario Valentino brand
2 and how in the heck they aren’t being sued by other designers. These
3 bags drive me crazy to be honest. … Not to mention, their symbol is
4 almost exactly like Valentino Garavani’s with a V and a circle. …
5 Sorry, I just had to rant because I am completely in awe, and I don’t
6 understand at all.”
7 45. Similarly, an article on easilydressed.com begins:
8 “This is confusing …
9 The cute little bag in the picture has an odd label that says it’s a Valentino, by
Mario Valentino.
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The price is attractive.
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Yet it looks like Celine.
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And just who is this Mario??!!
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Is it a Valentino or not?
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This question [] gets asked all the time our Facebook Group.”
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16 46. Another blog, bagbliss.com, informs its readers that “It is important to
17 know that there are two Valentino designers out there!” and that “[i]t is completely
18 understandable for the confusion.”
19 47. The Mario Valentino Defendants’ conduct—which is not permitted by
20 and is expressly contrary to the purpose of the Co-Existence Agreement, and which
21 is intentionally calculated to trade off Valentino’s goodwill in the handbag market—
22 has injured Valentino by leading consumers to believe that their handbags are the
23 same Valentino bags available at luxury retailers, but are now being sold at a lower
24 price, and/or comprise a diffusion line being offered by Valentino, thereby
25 associating Valentino with a lower tier handbag market.
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Complaint by Valentino S.p.A.
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Complaint by Valentino S.p.A.
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Complaint by Valentino S.p.A.
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11 62. The Palmellato handbag design is deceptively similar to and
12 substantially the same as the patented design of the ’517 Patent when viewed
13 through the eyes of the ordinary observer and considering the infringing product as
14 a whole.
15 63. The Mario Valentino Defendants’ unauthorized use, importation into the
16 United States, offer for sale, and sale of at least the Palmellato handbag design
17 identified in this Complaint during the term of the ’517 Patent infringes the ’517
18 Patent.
19 64. The Mario Valentino Defendants’ unauthorized use, importation into the
20 United States, offer for sale, and sale of at least the Palmellato handbag design
21 identified in this Complaint, which incorporates the patented design of the ’517
22 Patent, has caused, and will continue to cause, Valentino financial and reputational
23 harm.
24 65. The Mario Valentino Defendants’ infringement of the ’517 Patent has
25 been and continues to be willful and deliberate.
26 66. Unless the Mario Valentino Defendants’ acts are enjoined, Valentino
27 will suffer irreparable injury for which there is no adequate remedy at law.
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Complaint by Valentino S.p.A.
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Complaint by Valentino S.p.A.
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1 71. The Mario Valentino Defendants’ unauthorized use, offer for sale, sale,
2 and importation into the United States of at least the Rock handbag design identified
3 in this Complaint, which incorporates the patented design of the ’713 Patent, has
4 caused, and will continue to cause, Valentino financial and reputational harm.
5 72. The Mario Valentino Defendants’ infringement of the ’713 Patent has
6 been and continues to be willful and deliberate.
7 73. Unless the Mario Valentino Defendants’ acts are enjoined, Valentino
8 will suffer irreparable injury for which there is no adequate remedy at law.
9 FIFTH CLAIM FOR RELIEF
10 (Untrue or Misleading Advertising)
11 California Business & Professions Code § 17500
12 74. All previous paragraphs are incorporated by reference as if fully set
13 forth herein.
14 75. The Mario Valentino Defendants have engaged in advertising to the
15 public and offering for sale of Mario Valentino handbags. The advertisements are
16 disseminated to and received by the public in California and throughout the country.
17 76. The Mario Valentino Defendants have engaged in such advertising with
18 the intent to directly or indirectly dispose of Mario Valentino handbags and/or to
19 induce the public to enter into an obligation relating to the Mario Valentino
20 handbags.
21 77. The Mario Valentino Defendants’ advertising was untrue or misleading
22 and caused injury in fact to Valentino.
23 78. In making and disseminating the statements alleged herein, the Mario
24 Valentino Defendants knew, or by the exercise of reasonable care should have
25 known, that the statements were untrue or misleading.
26 79. Unless restrained by this Court, the Mario Valentino Defendants will
27 continue to engage in untrue and misleading advertising in violation of Section
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Complaint by Valentino S.p.A.
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1 17500 of the Business and Professions Code. Valentino has no adequate remedy at
2 law.
3 SIXTH CLAIM FOR RELIEF
4 (Unfair Competition)
5 California Business & Professions Code § 17200
6 80. All previous paragraphs are incorporated by reference as if fully set
7 forth herein.
8 81. The Mario Valentino Defendants’ actions, as alleged above, constitute
9 fraudulent, unfair and, unlawful conduct in violation of 15 U.S.C. §1125(a) and
10 California Business and Professions Code § 17500. Accordingly, the Mario
11 Valentino Defendants’ actions are in violation of Section 17200 of the Business and
12 Professions Code.
13 82. Unless restrained by this Court, the Mario Valentino Defendants will
14 continue to engage in such conduct. Valentino has no adequate remedy at law.
15 PRAYER FOR RELIEF
16 WHEREFORE, Valentino prays for judgment as follows:
17 A. An accounting and award of all gains, profits, savings and advantages
18 realized by the Mario Valentino Defendants for the wrongful conduct alleged
19 herein.
20 B. An enhancement of Valentino’s monetary award by three times pursuant
21 to 15 U.S.C. § 1117(a) and/or 35 U.S.C. § 284.
22 C. Damages for the Mario Valentino Defendants’ design patent
23 infringement pursuant to 35 U.S.C. § 289, including an award of the profits realized
24 thereby, and/or a reasonable royalty to be paid therefor.
25 D. A preliminary and permanent injunction restraining the Mario Valentino
26 Defendants, their affiliates, and any of their officers, directors, agents, employees,
27 servants, attorneys, successors, assigns and others controlling, controlled by or
28 affiliated with them and all those in privity or in active concert or participation with
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Complaint by Valentino S.p.A.
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1 any of the foregoing, and all those who receive actual notice by personal service or
2 otherwise from engaging in any acts that deceive or are likely to deceive consumers
3 as to the source of their goods.
4 E. A preliminary and permanent injunction restraining the Mario Valentino
5 Defendants, their affiliates, and any of their officers, directors, agents, employees,
6 servants, attorneys, successors, assigns and others controlling, controlled by or
7 affiliated with them and all those in privity or in active concert or participation with
8 any of the foregoing, and all those who receive actual notice by personal service or
9 otherwise from making, using, importing, exporting, distributing, supplying, selling
10 or offering to sell, or causing to be sold any product falling within the scope of the
11 ’517 Patent or the ’713 Patent, or otherwise contributing to or inducing the
12 infringement thereof.
13 F. Pre-judgment and post-judgment interest on Valentino’s monetary
14 award.
15 G. The costs of this action.
16 H. An award of Valentino’s attorney’s fees pursuant to 15 U.S.C.
17 § 1117(a), and/or 35 U.S.C. § 285.
18 I. Any such further relief as this Court may deem just and proper.
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20 Dated: July 22, 2019 ARNOLD & PORTER KAYE SCHOLER
LLP
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By:
24 James S. Blackburn
Oscar Ramallo
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Attorneys for Plaintiff
26 Valentino S.p.A.
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Complaint by Valentino S.p.A.
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Complaint by Valentino S.p.A.