Emeco v. RH Complaint

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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

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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

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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.

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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

pursuant to 28 U.S.C. § 1367.

3 http://thedealsleuth.wordpress.com/2008/06/18/restoration-hardware-class-action-payout-still-leaves-shareholders-short-of-full-value/.

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COMPLAINT

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

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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®.

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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.

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18. Below are images of the 1006 Navy Chair® and the 111 Navy Chair®.

1006 Navy Chair® 111 Navy Chair®

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COMPLAINT

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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

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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,

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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.

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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

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COMPLAINT

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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.

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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”

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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.

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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

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COMPLAINT

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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.

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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

consumers.5

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COMPLAINT

5 http://www.northbaybusinessjournal.com/61583/restoration-hardware-aims-for-150m-in-ipo/.

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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

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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

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6 http://www.sec.gov/Archives/edgar/data/1528849/000119312512282937/d70987ds1a.htm.

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COMPLAINT

summary of Emeco’s demands so that he could forward them to the key personnel at Restoration

Hardware.

40. Per Mr. Krevlin’s suggestion, on September 8, 2012 Mr. Buchbinder sent an email

to Mr. Krevlin, summarizing Emeco’s position and demands, and requesting that he bring this

issue to the attention of the key personnel at Restoration Hardware. Mr. Krevlin stated in

response, “Got it.”

41. Seeing no response from Restoration Hardware, on September 20, 2012, the

undersigned, representing Emeco, sent a letter to Restoration Hardware’s current CEO, Carlos

Alberini, again requesting that Restoration Hardware cease and desist its infringing conduct. The

letter requested that Restoration Hardware provide written assurances that it would comply with

Emeco’s demands by September 27, 2012, and stated that if Restoration Hardware did not,

Emeco would initiate legal proceedings to enjoin Restoration Hardware’s unlawful conduct.

42. On or about September 21, 2012, Restoration Hardware, in a clear admission as to

the confusingly similar nature of the “Naval Chair” name, modified its website to remove all

references to “Naval Chair” in describing its chairs and stools. The infringing products, now just

named the “Aluminum” line, however, remain for sale. Moreover, millions of catalogs describing

these products as part of the “Naval Chair” series already have been circulated to the public.

43. On September 27, 2012, Restoration Hardware’s counsel sent the undersigned a

letter stating that it would respond to Emeco’s September 20, 2012 letter sometime “next week.”

On September 28, 2012, Restoration Counsel’s sent another letter stating a “few preliminary

comments and questions,” but otherwise refusing to comply with Emeco’s demand that

Restoration Hardware cease and desist its infringing conduct.

Upon Information and Belief, Restoration Hardware’s Conduct is Willful and Part of a Well-Documented History of Using Others’ Designs and Trademarks

44. Emeco believes and therefore alleges that the identical nature of the Navy Chair®

and “Naval Chair” product lines is not mere coincidence, but is the result of willful, intentional

conduct that is part of Restoration Hardware’s established practice of using others’ designs and

trademarks for financial gain.

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COMPLAINT

45. On information and belief, Restoration Hardware’s infringing “Naval Chair”

product line is the result of the company’s efforts in advance of its IPO to grow revenue rapidly

without significant investment in the design and development of its own products. As Restoration

Hardware itself has stated, euphemistically, in its pre-IPO filings with the Securities and

Exchange Commission, “[a]t our core we are not designers, rather we are curators and composers

of inspired design and experiences.”7 In fact, Restoration Hardware is a “counterfeiter” of others’

designs. As Restoration Hardware acknowledges in those public filings, by “[e]xternally

discover[ing] and curat[ing]” others’ designs, as opposed to “[i]nternally design[ing] and

develop[ing]” its own products, it can cut the product development process from “12-18 months

lead time” to “3-9 months lead time” and “reduce product costs.”8

46. By contrast, it takes Emeco approximately 2 to 4 years to design, prototype, R&D,

engineer, market, and launch a new, original product, and there is no guarantee the product will

sell. By contrast, Restoration Hardware has skipped all of these steps and misappropriated the

design of the Navy Chair®, which already has proven market success, and which Restoration

Hardware intends to sell at a significantly discounted price.

47. Prior claims and lawsuits against Restoration Hardware further substantiate the

willfulness of Restoration Hardware’s present conduct.

48. For example, in 2003, Brookstone commenced an action against Restoration

Hardware regarding certain fans Restoration Hardware was selling, which were alleged to have

infringed upon Brookstone’s design patents (E.D. Mo., No. 4:03cv00264(CDP)).

49. In 2004, PRL Holdings, Inc. (Polo Ralph Lauren) brought an action against

Restoration Hardware with respect to its “Lauren Collection” of sofas, claiming trademark

infringement, dilution, and unfair competition (S.D.N.Y., No. 1:04cv01964(LAK)).

50. In 2005, the Good Home Co. filed an action against Restoration Hardware,

alleging that the company was affixing Good Home Co. marks to Restoration Hardware’s own

7 http://www.sec.gov/Archives/edgar/data/1528849/000119312512282937/d70987ds1a.htm. 8 Id.

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products and selling them without any authorization from the Good Home Co. (S.D.N.Y., No.

1:05cv02026(TPG)).

51. Also in 2005, the Hamil Textiles division of Tangiers International filed an action

against Restoration Hardware, claiming that Restoration Hardware committed copyright

infringement by using on its bedding products an artistic pattern substantially similar to one

created by Hamil, which Hamil was using in its own printed textiles (S.D.N.Y., No.

1:05cv04332(LLS)).

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52. In 2006, the Storus Corporation brought an action alleging that Restoration

Hardware was selling a money clip that infringed its design patent, trademark, and trade dress

rights with respect to its own money clip (N.D. Cal., No. 3:06cv02454(MMC)).

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53. In 2011, the antique and furnishings dealer Obsolete brought an action against

Restoration Hardware alleging intentional misrepresentation, fraudulent concealment, false

advertising, and unfair competition, claiming that a Restoration Hardware employee purchased

vintage furnishings at Obsolete, had them shipped directly to Restoration Hardware’s

headquarters, where they were subsequently reproduced (Cal. Super. Ct., Los Angeles, No.

SC112170). The complaint attached images showing the significant similarities between

Obsolete’s products and Restoration Hardware’s products. One example is below.

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COMPLAINT

54. As one store owner commented in response to the lawsuit in an article in the Los

Angeles Times, “[t]hey should call it Replication Hardware.”9

9 http://articles.latimes.com/2011/apr/30/home/la-hm-obsolete-restoration-20110430/3.

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COMPLAINT

55. In 2012, Lumetique, Inc. filed an action against Restoration Hardware alleging that

Restoration Hardware was selling a wood-wick candle product that infringed several design

patents held by Lumetique with respect to its own wood-wick candles (E.D. Tex., No.

2:12cv00049(JRG)).

Restoration Hardware Former CEO and Present “Creator and Curator” Gary Friedman’s

Active Participation in and Control of Restoration Hardware’s Unlawful Activities

56. Defendant Gary Friedman is former CEO and present “Creator and Curator” of

Restoration Hardware. On information and belief, he has directed, controlled, ratified, and

participated in Restoration Hardware’s infringing and unlawful activity. And as a substantial

equity owner in Restoration Hardware, Friedman, along with other investors, has and will

continue to profit substantially from such activity.

57. On information and belief, Friedman plays a core, central role in Restoration

Hardware’s infringing and unlawful activities. According to the Restoration Hardware website,

Friedman is personally “responsible for strategy, creative, design direction and concept

development for the Company.”10 In an article in the Wall Street Journal from 2011 profiling

Friedman, he is quoted as saying that Restoration Hardware is “completely personal—the kind of

aesthetic that I believe in, the way to live that I believe in.”11 The article further notes that “a

visit to Friedman’s home . . . reveals just how closely connected the brand is to Friedman,” and

quotes a competitor saying that “Restoration Hardware is dead . . . . It’s become a Gary Frie

interpretation of home furnishings.”

dman

12 A New York Times profile from earlier this year similarly

10 http://www.restorationhardware.com/company-info/management-team.jsp. 11 http://online.wsj.com/article/SB10001424052748704436004576300181946707482.html#ixzz27LthcpFE. 12 Id.

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COMPLAINT

states that Friedman “is considered the driving force behind the company’s vision and

aesthetic.”13

58. Friedman has a series of “letters” posted on the Restoration Hardware website

describing the direction of the company; as he notes in one post, “[i]n the spirit of ‘just being me,’

we will continue to push the boundaries, be authentic to our own unique point of view . . . .”14

59. On information and belief, Friedman has been and is a primary actor in the

activities of Restoration Hardware that give rise to Emeco’s claims; he has had knowledge of,

consented to, and exercised control over Restoration Hardware’s unlawful and infringing

activities.

Restoration Hardware’s Conduct Causes Immediate and

Irreparable Harm to Emeco

60. The significant harm caused by Restoration Hardware’s conduct is both immediate

and irreparable to Emeco’s exclusive rights.

61. Restoration Hardware’s unlawful activities have caused, and will continue to

cause, irreparable injury by hurting the goodwill and reputation established by Emeco’s iconic

furniture pieces and the Navy Chair® name. The Navy Chair® design and name are at the core

of the Emeco brand; they are equivalent to Nike’s Swish or the Mercedes Benz logo. Restoration

Hardware’s cheap counterfeit knockoffs will irreparably harm Emeco’s reputation and significant

goodwill in the marketplace.

62. The irreparable harm caused and, in the future, threatened by Restoration

Hardware is on a massive scale, incomparable to that caused by a run-of-the mill, small-time

counterfeiter. Restoration Hardware is an established company with 87 retail and 10 outlet stores

throughout the United States and Canada. It sends its catalog to tens of millions of consumers

each year. Consumers are likely to be deceived into thinking that the products Restoration

Hardware sells are genuine, legitimate articles, not cheap counterfeits made overseas.

13 http://dealbook.nytimes.com/2012/08/16/restoration-hardware-co-chief-steps-down-after-an-inquiry/. 14 http://www.restorationhardware.com/content/page.jsp?id=garysp11&&link=GarysLetter.

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COMPLAINT

63. An injunction also would serve to prevent Restoration Hardware from continuing

to infringe Emeco’s Navy Chair® trade dress and trademarks, and would resolve the ongoing and

future public confusion regarding Emeco’s Navy Chair® trade dress and trademarks.

FIRST CAUSE OF ACTION (TRADE DRESS COUNTERFEITING AND INFRINGEMENT,

15 U.S.C. §§ 1114(1), 1125(a))

64. Emeco incorporates by reference the allegations of paragraphs 1-63 above as if

fully set forth herein.

65. Emeco has exclusively manufactured, advertised, and sold the highly distinctive

and famous Navy Chair® product line. The highly distinctive and famous Navy Chair® product

line has a quality exclusively controlled by Emeco.

66. The United States Patent and Trademark Office has legally issued federal

registration nos. 3191187 and 2511360, which cover the design and outline of the Navy Chair®.

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. Emeco also has common law

rights in the design of its Navy Chair® products.

67. The protected trade dress of the Navy Chair® product line is inherently distinctive,

unique, and non-functional.

68. Emeco has expended much effort in the form of advertising, promotion, and sales

to promote the trade dress configuration of the Navy Chair® product line as distinctive of

Emeco’s goods in commerce.

69. As a result of such extensive and exclusive use and promotion of the Navy Chair®

product line trade dress configuration, the configuration has developed secondary meaning as an

indicator that Emeco is the source of the goods.

70. Emeco’s trademarked design represents valuable goodwill owned by Emeco.

71. Restoration Hardware has knowingly and willfully used in interstate commerce

counterfeits that are identical with, or substantially indistinguishable from, Emeco’s Navy Chair®

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COMPLAINT

trade dress configuration in connection with the sale, offering for sale, distribution, and

advertising of goods and/or services.

72. Restoration Hardware’s said use is likely to cause confusion, mistake, or deception

as to the source of origin, sponsorship, or approval of its products, in that purchasers or others are

likely to believe Restoration Hardware’s products are Emeco’s products or the products of a

company legitimately connected with, approved by, or related to Emeco.

73. Restoration Hardware’s said use enables it to deceptively advertise, merchandise,

market, display, and promote that its products emanate from Emeco or from a concern

legitimately connected with or approved by Emeco, and to substitute and pass off its products as

Emeco’s products. It also enables purchasers of Restoration Hardware’s products to represent

and display that such products emanate from Emeco or from a concern legitimately connected

with or approved by Emeco.

74. Restoration Hardware’s said knowing and willful use has imitated, counterfeited,

and infringed Emeco’s trade dress configuration in interstate commerce in violation of Section

32(1) of the Lanham Act, 15 U.S.C. § 1114(1).

75. Restoration Hardware’s aforesaid acts also constitute false designation of

association, affiliation, connection, endorsement, and/or approval under 15 U.S.C. § 1125(a).

76. Upon information and belief, Restoration Hardware has engaged in such conduct

willfully, deliberately, and in conscious disregard of Emeco’s rights, making this an exceptional

case within the meaning of 15 U.S.C. § 1117.

77. By reason of the foregoing, Emeco has been injured in an amount not yet

ascertained and is entitled to the remedies provided for in 15 U.S.C. §§ 1116 et seq.

78. Restoration Hardware’s conduct described herein has caused, and if not enjoined

will continue to cause, irreparable damage to Emeco’s rights in its trade dress and to the business,

positive reputation, and goodwill of Emeco, which cannot be adequately compensated solely by

monetary damages. Emeco therefore has no adequate remedy at law and seeks preliminary and

permanent injunctive relief pursuant to 15 U.S.C. §§ 1116 et seq.

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COMPLAINT

SECOND CAUSE OF ACTION (TRADEMARK COUNTERFEITING AND INFRINGEMENT,

15 U.S.C. §§ 1114(1), 1125(a))



80. The United States Patent and Trademark Office has legally issued federal

registration nos. 3016791 and 3912854, which cover the marks “Navy Chair” and “111 Navy

Chair.” Under these registrations, Emeco has the exclusive right to use the Navy Chair®

trademark in connection with its furniture. Emeco also has common law rights in this trademark

in connection with its furniture.

81. Emeco has used the inherently distinctive and famous Navy Chair® trademarks

continuously in connection with its furniture.

82. Emeco has exerted significant effort in the form of advertising, promotion, and

sales to promote the Navy Chair® trademark as a name distinctive of Emeco’s goods in

commerce.

83. As a result of such extensive and exclusive use and promotion of the Navy Chair®

trademark, the mark has developed secondary meaning as an indicator that Emeco is the source of

goods identified by the Navy Chair® trademark.

84. Emeco’s Navy Chair® trademark represents valuable goodwill owned by Emeco.

85. Restoration Hardware has knowingly and willfully used in interstate commerce the

“Naval Chair” mark, a counterfeit mark that is substantially indistinguishable from Emeco’s Navy

Chair® trademark, in connection with the sale, offering for sale, distribution, and advertising of

goods and/or services.


as to the source of origin, sponsorship, or approval of Restoration Hardware’s products, in that

purchasers or others are likely to believe Restoration Hardware’s products are Emeco’s products

or the products of a company legitimately connected with, approved by, or related to Emeco.

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COMPLAINT

87. Restoration Hardware’s use enables it to represent and deceptively advertise,

merchandise, market, display, and promote that Restoration Hardware’s products emanate from

Emeco or from a concern legitimately connected with or approved by Emeco, and to substitute

and pass off Restoration Hardware’s products as Emeco’s products. It also enables purchasers of

Restoration Hardware’s products to represent and display that such products emanate from

Emeco or from a concern legitimately connected with or approved by Emeco.


and infringed Emeco’s Navy Chair® trademark in interstate commerce in violation of 15 U.S.C.

§ 1114(1).

89. Restoration Hardware’s aforesaid acts constitute trademark infringement in

violation of 15 U.S.C. § 1125(a).





ascertained and is entitled to the remedies provided for in 15 U.S.C. §§ 1116 et seq.


will continue to cause, irreparable damage to Emeco’s rights in its marks and to the business,

positive reputation and goodwill of Emeco, which cannot be adequately compensated solely by


permanent injunctive relief pursuant to 15 U.S.C. §§ 1116 et seq.

THIRD CAUSE OF ACTION

(FEDERAL DILUTION, 15 U.S.C. § 1125(c))



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COMPLAINT

94. Emeco’s Navy Chair® trade dress and trademarks are famous and distinctive and

became famous and distinctive before any of the unlawful conduct of Restoration Hardware

complained of herein.

95. Restoration Hardware’s aforesaid acts constitute trademark uses in commerce that

are likely to dilute the distinctive quality of the Navy Chair® trade dress and trademarks, by both

blurring and tarnishment, in violation of Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c).








permanent injunctive relief pursuant to 15 U.S.C. § 1116.

FOURTH CAUSE OF ACTION

(COMMON LAW TRADE DRESS INFRINGEMENT)



99. The general consuming public of California widely recognizes the Navy Chair®

trade dress configuration as designating Emeco as the source of services and/or goods. Emeco

has common law trade dress rights in the Navy Chair® trade dress configuration under California

law.

100. Restoration Hardware has knowingly and willfully used in California counterfeits

that are identical with, or substantially indistinguishable from, Emeco’s Navy Chair® product

trade dress configuration in connection with the sale, offering for sale, distribution, and

advertising of goods and/or services.

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COMPLAINT












and infringed Emeco’s trade dress configuration in commerce in violation of California common

law.


willfully, deliberately, and in conscious disregard of Emeco’s rights.


ascertained and is entitled to the remedies provided for it under the common law.





permanent injunctive relief.

FIFTH CAUSE OF ACTION

(COMMON LAW TRADEMARK INFRINGEMENT)



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COMPLAINT

108. The general consuming public of California widely recognizes the Navy Chair®

trademark as designating Emeco as the source of services and/or goods. Emeco has common law

rights in the Navy Chair® trademark under California law.

109. Restoration Hardware has knowingly and willfully used in California the “Naval

Chair” mark, a counterfeit mark that is substantially indistinguishable from Emeco’s Navy

Chair® trademark, in connection with the sale, offering for sale, distribution, and advertising of

goods and/or services.












and infringed Emeco’s trademarks in commerce in violation of California common law.


willfully, deliberately, and in conscious disregard of Emeco’s rights.


ascertained and is entitled to the remedies provided for it under the common law.






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COMPLAINT

SIXTH CAUSE OF ACTION (DILUTION, CAL. BUS. & PROF. CODE §§ 14330 et seq. AND COMMON LAW)



117. Restoration Hardware’s aforesaid acts in California constitute trademark uses in

commerce that are likely to dilute the distinctive quality of the Navy Chair® trade dress and

trademarks, by both blurring and tarnishment, in violation of Section 14330 of the California

Business and Professions Code.






SEVENTH CAUSE OF ACTION (CAL. BUS. & PROF. CODE §§ 17200 et seq.)



120. Restoration Hardware’s acts, as alleged above, constitute unlawful and/or unfair

business practices in violation of the California Unfair Competition Law (“UCL”), Cal. Bus. &

Prof. Code §§ 17200 et seq.

121. Restoration Hardware’s said acts are unlawful and/or unfair under the UCL

because they are likely to cause confusion, mistake, or deception as to the source of origin,

sponsorship, or approval of its products, in that purchasers or others are likely to believe

Restoration Hardware’s products are Emeco’s products or the products of a company legitimately

connected with, approved by, or related to Emeco.

122. Restoration Hardware’s said acts are unlawful and/or unfair under the UCL

because they enable it to deceptively advertise, merchandise, market, display, and promote that its

products emanate from Emeco or from a concern legitimately connected with or approved by

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COMPLAINT

Emeco, and to substitute and pass off its products as Emeco’s products. Restoration Hardware

also enables purchasers of Restoration Hardware’s products to represent and display that such

products emanate from Emeco or from a concern legitimately connected with or approved by

Emeco.


ascertained and is entitled to the remedies provided for in Sections 17200 et seq. of the Cal. Bus.

& Prof. Code.






PRAYER FOR RELIEF

WHEREFORE, Emeco prays for judgment against Restoration Hardware and for the

following relief:

A. Restoration Hardware, its officers, directors, agents, employees, privies,

successors, and assigns, and all persons in active concert or participation with them who receive

actual notice or knowledge of this injunction by personal service or otherwise, be enjoined and

restrained preliminarily and permanently:

1. from further using Navy Chair®, Naval, or any other confusingly similar

variation in connection with the sale, manufacturing, or advertising of furniture

2. from manufacturing, selling, importing, exporting into the United States, or

advertising furniture mimicking Emeco’s Navy Chair® trademark and trade dress, described

above

3. from further unlawfully trading upon and misappropriating the goodwill and

reputation of Emeco and competing unfairly with Emeco;

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COMPLAINT

B. Restoration Hardware file with the Court and serve on Emeco in accordance with

15 U.S.C. § 1116, within thirty (30) days after service on them of such injunction (or such

extended period as the Court may direct), a report in writing and under oath, setting forth in detail

the manner and form in which Restoration Hardware has complied with the injunction;

C. In accordance with 15 U.S.C. § 1116, Restoration Hardware deliver to Emeco, at

Restoration Hardware’s expense, for destruction or other disposition, all products, including,

without limitation, all furniture, labels, packaging, signs, prints, advertisements, promotional, and

other materials incorporating, bearing or displaying a trademark or trade dress confusingly similar

to the aforementioned trademarks or aforementioned trade dress of Emeco or which otherwise

violates 15 U.S.C. §§ 1114 or 1125(a), in the possession, custody, or control of Restoration

Hardware, as well as any reproduction, counterfeit, copy, or colorable imitation thereof, and all

plates, molds, matrices, masters, or other materials or means of making the same;

D. Restoration Hardware provide direct notice to all recipients of its catalog and on its

website that the “Naval Chair” product line is no longer available, that it was an unauthorized and

unlawful replica of the Navy Chair® product line, and that consumers interested in genuine Navy

Chair® products may purchase them from Emeco or its authorized retail partners;

E. Restoration Hardware be required to account and pay over to Emeco all gains,

profits, and advantages derived from its violation of 15 U.S.C. §§ 1114 and 1125(a), and in

addition the damages which Emeco has sustained by reasons thereof, together with legal interest

from the date of accrual thereof;

F. Because of the willful nature of said violations and pursuant to 15 U.S.C. § 1117,

Restoration Hardware be required to pay over to Emeco three times the amount of said profits and

damages;

G. If Emeco so elects before final judgment, Restoration Hardware be required to pay

over to Emeco statutory damages pursuant to 15 U.S.C. § 1117(c) for the willful or non-willful

use of a counterfeit trade dress and mark;

H. Restoration Hardware be required to account and pay to Emeco all gains, profits,

and advantages derived by it from and by reason of its violation of unfair competition under

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COMPLAINT

California law, together with the damages which Emeco has sustained as a result thereof, and

legal interest from the date of accrual thereof;

I. Because of the willful and deliberate nature of Restoration Hardware’s acts and the

willful disregard for the rights of Emeco, Restoration Hardware be required to pay over to Emeco

exemplary damages in an amount to be determined by the Court;

J. Restoration Hardware be required to pay over to Emeco its reasonable attorney

fees and costs pursuant to 15 U.S.C. § 1117 and applicable California statutory law; and

K. Such other and further relief as this Court deems just and proper.

DEMAND FOR JURY TRIAL

Emeco hereby demands a jury trial of all issues in this Complaint which are triable to a

jury.

DATED: October 1, 2012

Munger, Tolles & Olson LLP

By: /s/ John W. Spiegel JOHN W. SPIEGEL

Exhibit 1

Exhibit 2

Emeco v. RH Complaint

Documents

Transcript of Emeco v. RH Complaint