KROMA MAKEUP EU, LLC, a United Kingdom Limited Liability Company, Plaintiff-Appellant,
v.
BOLDFACE LICENSING BRANDING, INC., a Nevada Corporation, KIMBERLY KARDASHIAN, a California resident, KOURTNEY KARDASHIAN, a California resident, KHLOE KARDASHIAN, a California resident, BY LEE TILLETT, INC., a Florida Corporation Defendants-Appellee.
Appeal
from the United States District Court for the Middle District
of Florida Docket No. 6:14-cv-01551-PGB-GJK
Before
MARCUS and DUBINA, Circuit Judges, and GOLDBERG,
[*]
Judge.
GOLDBERG, JUDGE
Plaintiff-Appellant
Kroma Makeup EU, LLC ("Kroma EU") appeals the
district court's grant of summary judgment based on its
finding that Kroma EU lacked standing to enforce the KROMA
trademark. Because Kroma EU does not have sufficient rights
in the mark to sue under the Lanham Act, we affirm the
judgment of the district court.
BACKGROUND
Kroma
EU is the former European distributor of cosmetics products
using the federally registered mark, KROMA. The owner and
registrant of the mark is By Lee Tillett, Inc.
("Tillett") and the rights to use the KROMA mark in
the United States rest solely with Tillett. In October 2012,
Tillett granted an exclusive license to Kroma EU to import,
sell, and distribute KROMA products in Europe, and to use the
KROMA mark in furtherance of its business. As part of the
licensing agreement, Tillett guaranteed that it owned the
KROMA mark and would hold Kroma EU harmless from any
judgments against Tillett based on the mark. Tillett retained
the right to use the KROMA mark in the United States.
Defendant-Appellees-the
Kardashian sisters-were celebrity endorsers of a cosmetic
line called "Khroma Beauty," sold and manufactured
by Defendant Boldface Licensing & Branding, Inc.
("Boldface"). The Kardashians claim that they had
no personal knowledge of the KROMA trademark until an
entertainment news website, TMZ, published an article about
the Kardashians' potential infringement. However, before
the Khroma Beauty line launched, Boldface had purportedly
conducted a trademark search that revealed the existence of
the KROMA mark. The Kardashians claim that they did not
receive this information. Boldface sought to register the
KHROMA or KARDASHIAN KHROMA mark with the U.S. Patent and
Trademark Office, but registration was denied because of
likelihood of confusion with the previously registered KROMA
mark.
After
the Khroma line was released, Boldface sought a declaratory
judgment in California federal court that Boldface did not
infringe the KROMA trademark. There, Tillett filed a
trademark infringement counterclaim, adding the Kardashians
as counterclaim defendants. The California district court
granted Tillett's motion for a preliminary injunction
against Boldface, finding that Tillett had demonstrated a
likelihood of success on the trademark infringement claim.
Boldface Licensing Branding v. By Lee Tillett,
Inc., 940 F.Supp.2d 1178 (C.D. Cal. 2013). Thereafter,
Boldface rebranded the product line to "Kardashian
Beauty" and the parties settled the dispute. Kroma was
not a party to the California action and did not receive a
share of the settlement recovery from Tillett.
Kroma
EU subsequently filed this action in the Middle District of
Florida against Boldface and the Kardashians, alleging that
Boldface directly infringed the KROMA trademark under common
law trademark infringement and the Lanham Act by distributing
"Khroma" branded cosmetics in Europe, and that the
Kardashians were vicariously liable for Boldface's
infringement. Kroma EU also brought claims against Tillett,
alleging a cause of action for promissory estoppel. As to the
promissory estoppel claim, the district court held in an
earlier order that under Florida law, a foreign licensee
could not state a claim for promissory estoppel against its
licensor; however, Kroma EU was able to proceed against
Tillett under a breach of contract theory. Kroma Makeup
EU, Ltd. v. Boldface Licensing Branding, Inc., No.
6:14-cv-1551-ORL, 2015 WL 1708757, at *1 (M.D. Fla. Apr. 15,
2015).
The
Kardashians moved for summary judgment arguing that Kroma EU
did not have the requisite standing to bring the infringement
action and that the trademark infringement cause of action
was barred by claim preclusion. Kroma EU also moved for
partial summary judgment on the issue of liability. Earlier
in the litigation, Tillett successfully moved to compel
arbitration and Kroma EU's claim against Tillett remains
stayed pending the arbitration.
The
district court granted the Kardashians' motion. The court
found that Kroma EU lacked standing to sue for trademark
infringement and did not reach the Kardashians' claim
preclusion argument. Relying primarily on the licensing
agreement between Tillett and Kroma EU, the district court
held that the agreement "plainly authorized only Tillett
to enforce the trademarks" and to "protect"
the mark "from any attempts of illegal use," while
"Kroma EU's sole directive was to inform Tillett of
instances of infringement." Based on this reading, the
district court concluded that these provisions "plainly
authorized only Tillett to enforce the trademarks governed by
the License Agreement." Therefore, Kroma EU
"lack[ed] contractual authority, and hence standing, to
pursue § 1125(a) violations against infringers in its
own capacity." Based on Kroma EU's purported lack of
standing, the court denied Kroma EU's motion for partial
summary judgment as moot.
JURISDICTION
At the
time of this appeal, the district court had not yet disposed
of all claims against all parties. Kroma EU's claim
against Tillett had been stayed pending arbitration, and the
district court had failed to enter a default judgment as to
Boldface, which was served with process but had never
appeared. Instead of dismissing the appeal for lack of
jurisdiction, however, we gave Kroma EU the opportunity to
request certification of the summary judgment order from the
district court under Rule 54(b). Order, Kroma Makeup EU,
LLC v. Boldface Licensing & Branding, Inc., et
al., No. 17-14211 (11th Cir. Feb. 5, 2019). A Rule 54(b)
judgment has now been entered as to the claims against the
Kardashians and final judgment was entered in favor of the
Kardashians. Rule 54(b) Judgment, Kroma Makeup EU, LLC v.
Boldface Licensing & Branding, Inc., et al.,
6:14-cv-1551, ECF No. 172 (M.D. Fla. Feb. 21, 2019). The
Court, then, maintains jurisdiction over this appeal.
STANDARD
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