MEMORANDUM & ORDER Plaintiff the City of New York (“Plaintiff” or the “City”) commenced this action against defendants Blue Rage, Inc. d/b/a The Cop Shop (“Cop Shop”), Salvatore Piccolo (“Piccolo”), and Susan Piccolo (collectively “Defendants”) alleging, inter alia, violations of the Lanham Act, 15 U.S.C. §1051, et seq., and of state law. Currently before the Court is the City’s motion for summary judgment, its second such motion in this matter. See Motion, ECF No. 80. For the reasons set forth below, the motion is granted. I. BACKGROUND A. Prior Memorandum and Order By Memorandum and Order dated January 27, 2020 (the “M&O”), District Judge Sandra J. Feuerstein1 resolved cross-motions for summary judgment in this case, granting partial summary judgment to Plaintiff and denying Defendants’ motion. See City of New York v. Blue Rage, Inc., (“Blue Rage I”), 435 F. Supp. 3d 472 (E.D.N.Y. 2020). Familiarity with the M&O and the factual history as set forth in that prior order is assumed and is repeated here to the extent necessary to provide context for the instant motion. The following facts are taken from the M&O. The City holds various trademarks registered with the United States Patent and Trademark Office including the abbreviation “NYPD” (the “NYPD Mark”), a design consisting of the words “POLICE DEPARTMENT CITY OF NEW YORK around a shield design (the “NYPD Shield,” below), the abbreviation “FDNY” (the “FDNY Mark”), and a distinctive shield with the words FIRE DEPARTMENT CITY OF NEW YORK, the colors red, white, and blue, and a stylized Maltese cross with flames inside over a representation of the New York City skyline (the “FDNY Shield,” below): The City holds numerous federal trademark registrations for these marks in various classes of souvenir merchandise.2 The City operates an extensive merchandise licensing program administered by an exclusive agent selling officially licensed souvenir merchandise with the NYPD and FDNY trademarks to the general public. Through the City’s trademark licensing program, merchandise is sold in the United States, Europe, Australia, China, and Japan, and generates annual retail sales of tens of millions of dollars, the vast majority attributable to the sale of officially licensed NYPD and FDNY souvenir merchandise. Defendant Salvatore Piccolo owns, and is the Chief Executive Officer of, defendant Blue Rage, which does business as the Cop Shop, and his wife, Defendant Susan Piccolo, is a manager at the store. The Cop Shop operates a retail store open to the public located at 560 Broadway, Massapequa, New York, and in addition, Defendants operate a website. Defendants do not dispute that in addition to selling licensed merchandise, they make and sell unlicensed merchandise bearing the NYPD and FDNY trademarks. The City commenced this suit asserting six (6) causes of action against Defendants: Count I for trademark infringement under Section 32 (1)(a) of the Lanham Act, 15 U.S.C. §1114 (1)(a); Count II for false designation of origin and/or false description or representation in violation of Section 43(a) of the Lanham Act, 15 U.S.C. §1125(a); Count III for trademark dilution in violation of 15 U.S.C. §1125(c); Count IV for common law unfair competition; Count v. for trademark infringement in violation of New York General Business Law §360-k; and Count VI for deceptive trade practices and false advertising under New York General Business Law §§349, 350, and 350-e. The City’s first motion for summary judgment sought determination of the Lanham Act claims only. As to the claims of trademark infringement and false designation of origin, the M&O analyzed those claims under a two-prong test to determine (1) whether the plaintiff’s mark is entitled to protection and (2) whether use of the mark by the defendant is likely to cause consumer confusion regarding the origin or sponsorship of the defendant’s goods. Blue Rage I, 435 F. Supp. 3d at 485-86 (citing Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93, 102 (2d Cir. 2010)). While the registration of a mark entitles the owner to a presumption of validity, the presumption “may be overcome where a party has established trademark rights through prior use.” Blue Rage I, 435 F. Supp. 3d at 486. Defendants asserted, without contradiction from the City, that they had been “selling essentially the same products since 1995.” Id. at 487. Based on the “first use in commerce” dates designated by the City in the trademark registrations, the Court determined that the NYPD Mark, NYPD Shield, and FDNY Shield were all used on clothing prior to 1995 and thus the City was the senior user as to those marks on that category of merchandise. Id. The Court further noted that “[t]he City’s priority of use of these marks on clothing, however, does not automatically create trademark rights for their use on other classes of merchandise.” Id. As to the FDNY Mark on clothing and all the marks on the non-clothing categories of merchandise, the first “use in commerce” dates indicated on the registrations were all after 1995. Crediting Defendants’ assertion regarding their sale of their products since 1995 and noting that this assertion “barely satisfies their burden of prior use for the purpose of this motion,” id., the Court concluded that since “the City’s entitlement to the statutory presumption as to any mark first used since 1995 is at issue,” summary judgment as to those marks and classes of merchandise was precluded. Id. In conclusion, the M&O, inter alia, granted the City’s motion for summary judgment on the trademark infringement and false designation of origin claims “as to the NYPD Shield, NYPD Mark, and FDNY Shield as used on merchandise from Class 025/Clothing,” denied the trademark infringement and false designation of origin claims as to all other merchandise categories, and denied the Lanham Act dilution claim.3 Id. at 494. Defendants failed to oppose the City’s motion for summary judgment on Defendants’ counterclaim for cancellation of the trademarks or their defenses. As a result, the counterclaim and defenses were deemed abandoned and dismissed. Id. at 493. A determination of damages was held in abeyance pending resolution of the remaining claims. Id. at 494. B. Post-M&O Procedural Activity Judge Feuerstein set a trial for March 9, 2020. By letter dated March 5, 2020, the City withdrew its Lanham Act claim for dilution (Count III) as well as its three causes of action under New York law (Counts IV, V, and VI). (See ECF No. 64.) All four counts were dismissed by electronic order dated March 25, 2021. The City further indicated its belief that withdrawal of the dilution claim eliminated the need for a trial. (See ECF No. 64.) Defendants responded, noting that notwithstanding the withdrawal of four claims, factual issues remained regarding whether Defendants were using the marks on items other than clothing prior to the City’s use of the marks on such items. (See ECF No. 69.) At a conference held before Judge Feuerstein on March 9, 2020, Plaintiff requested permission to file a new motion limited to when the marks were first used, and further requested entry of an injunction barring Defendants from selling unlicensed goods during the pendency of the case. The Court set a briefing schedule on the motion and granted the injunction request. (See Minute Entry, ECF No. 71.) The injunction was entered by order dated March 12, 2020. (See Injunction, ECF No. 73.) C. The Current Motion The City’s motion seeks resolution of the issue of whether the presumption of validity of its marks may be overcome by a “prior use” defense. It argues, inter alia, that: (1) Defendants have offered no “hard evidence” to support the defense (Plaintiff’s Memorandum of Law in Support (“Pl. Mem.”), at 1, ECF No. 83); (2) the City used the marks long before Defendants (id. at 12); and (3) Defendants cannot establish that they acquired trademark rights to the marks and have raised arguments and defenses legally inconsistent with a prior use defense. (Id. at 14-15.) In addition, the City contends that it had the “exclusive and superior right” to expand its use of the marks into “related classes of souvenir goods” (Id. at 2.) The City seeks an award of statutory damages in the total amount of $3,500,000. Defendants raise the following issues in opposition: (1) the M&O did not specifically find that the Defendants used the marks “as trademarks,” and the City admits they were not used as such by Defendants, thus precluding a finding of infringement (Memorandum in Opposition (“Defs’ Opp.”), at 2, 5, ECF No. 87); (2) Defendants’ use of the marks is “functional” (id. at 4-5; (3) Defendants’ have a “fair use” defense under 15 U.S.C. §1115(b)(4) (id. at 6-7); (4) Defendants are not counterfeiters because the City failed to establish that the marks were used “in a manner likely to deceive the public as to origin,” and at a minimum, Plaintiff should have provided a survey (id. at 6-7). As to damages, Defendants contend that statutory damages are inappropriate in light of evidence provided by Defendants of business records and the declarations they submitted, (id. at 8-9), and there is no proof of willfulness on Defendants’ part. (Id. at 9.) II. LEGAL STANDARD Summary judgment is warranted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). The movant bears the burden of demonstrating that “no genuine issue of material fact exists.” Marvel Characters, Inc. v. Simon, 310 F.3d 280, 286 (2d Cir. 2002) (citations omitted). “An issue of fact is ‘material’ for these purposes if it ‘might affect the outcome of the suit under the governing law,’” while “[a]n issue of fact is ‘genuine’ if ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’” Konikoff v. Prudential Ins. Co. of Am., 234 F.3d 92, 97 (2d Cir. 2000) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986)). When determining whether any material facts are in dispute, the court “must examine the evidence in the light most favorable to, and draw all inferences in favor of, the non-movant….” Marvel Characters, 310 F.3d at 286 (citations omitted). The party opposing summary judgment must, however, “do more than simply show that there is some metaphysical doubt as to the material facts” but rather “must come forward with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (emphasis in original) (internal quotation marks omitted). Mere conclusory allegations, speculation, or conjecture will not avail a party resisting summary judgment. See Shannon v. N.Y.C. Transit Auth., 332 F.3d 95, 99 (2d Cir. 2003). Unless the non-moving party produces “significant probative evidence” demonstrating that a factual dispute exists, summary judgment is appropriate. Anderson, 477 U.S. at 249. III. DISCUSSION A. Prior Use Defense The City’s motion seeks resolution of the sole remaining issue that defeated its prior motion for summary judgment on a subset of their claims concerning whether the presumption of validity of its marks may be overcome by a prior use defense for those claims.4 To prevail on a prior use defense, “the claimed senior user must demonstrate (1) present rights in the mark, (2) acquired prior to the date of registration, (3) continual use of the mark since that date, and (4) use prior to the registrant on the goods or services that are in issue.” Patsy’s Italian Rest., Inc. v. Banas, 508 F. Supp. 2d 194, 217 (E.D.N.Y. 2007). In addition to being the first to use the mark, “the type of use a [party asserting prior use] must make is one that is sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark.” Dual Groupe, LLC v. Gans-Mex LLC, 932 F. Supp. 2d 569, 573-74 (S.D.N.Y. 2013) (internal quotation marks and citation omitted). “A party asserting prior use against a claim of infringement of a registered mark must prove prior use by preponderance of the evidence.” Amped & Collection Inc. v. Hinton, No. 18-CV-6094, 2018 WL 5283912, at *5 (S.D.N.Y. Sept. 10, 2018) (citing Lane Capital Mgmt. Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337, 345 (2d Cir. 1999)). In opposition to the first summary judgment motion, Defendants attempted to assert a “prior use” defense on the theory that “the Defendants were using such symbols in the same way they are presently from a time before any of the asserted trademark registrations were registered.” See Memorandum in Opposition to Plaintiff’s Motion for Summary Judgment at 8, ECF No. 50. With the exception of three of the marks used on clothing, the Court found no evidence that Plaintiff had commenced using the marks on other classes of merchandise prior to Defendants’ asserted uses in 1995, and denied the City’s motion for summary judgment on this basis. Plaintiff then filed the instant motion to resolve only the availability of a prior use defense, which was addressed in cursory fashion in the M&O. Defendants’ opposition papers make clear that, in fact, they are not asserting a prior use defense. Instead, Defendants raise various other arguments — some of which the Court has already rejected — and appear to ask the Court to not only deny summary judgment on the outstanding claims for which the M&O denied summary judgment, but revisit the Court’s prior determination that Plaintiff is entitled to summary judgment on its claims for trademark infringement of the NYPD Mark, NYPD Shield, and FDNY Shield as used on clothing. Because Defendants do not, in fact, assert a prior use defense and have abandoned this defense, the Court finds, on that basis alone, Plaintiff is entitled to summary judgment on the issue of prior use. Moreover, while an analysis of the merits of this defense is not even necessary, as explained, Defendants’ statements and admissions make clear that they do not have a viable prior use defense. As an initial matter, Defendants cannot survive summary judgment because they have failed to offer sufficient evidence concerning the time they commenced selling goods from the varying classes of merchandise for which the City has trademarks.5 More importantly, irrespective of the timing of any sales by Defendants, Defendants’ admissions and legal arguments show that they are neither asserting, nor entitled to, a prior use defense. “Prior use” is a legal term and is not simply who was first to sell an item with a mark. The user must assert ownership of the mark. See Treeline Imports, Inc. v. Vernikov, 239 F. Supp. 3d 542, 557-58 (E.D.N.Y. 2017) (the “standard test of ownership is priority of use” (internal quotation marks and citation omitted)). Defendants affirmatively represent that they have no ownership interest in the marks. (See Defs. Resp. 5 (admitting that they “do not claim any ownership interest in the marks and logos used by the NYPD and FDNY as trademarks.”)) Similarly, they do not suggest that their prior use of the marks was “open and public use of such nature and extent as to create, in the mind of the relevant purchasing public, an association of the designation with the goods and services of the party claiming priority rights in the designation.” Vantone Grp. Ltd. Liab. Co. v. Yangpu NGT Indus. Co., No. 13-CV-7639, 2016 WL 4098564, at *5 (S.D.N.Y. July 28, 2016) (internal quotation marks and citation omitted). To the contrary, they admit that they “[d]o not use marks associated with the NYPD and FDNY as trademarks to designate the origin of any goods of their own making bearing such marks” (Defs. Resp. 6), and state that they “do not in any way use any symbol of the FDNY or NYPD as a brand, or as a trademark to indicate source or sponsorship of ‘unlicensed’ products.” (Id. 20.) As Defendants have no prior use defense, the Court finds that the presumption of validity of the registration of the marks in all classes of merchandise has not been rebutted.6 Likelihood of consumer confusion exists for the same reasons as set forth in the M&O and need not be repeated or deviated from here. See Blue Rage I, 435 F. Supp. 3d at 488-90 (concluding that “[u]se of the City’s marks creates confusion by suggesting that Defendants’ products are affiliated with, sponsored by, or otherwise connected to the City by way of the NYPD and/or FDNY”). B. Defendants’ Additional Arguments Having abandoned their claim to a prior use defense, Defendants now raise a new argument that they did not advance in opposing Plaintiff’s first motion for summary judgment and also seek to relitigate other arguments that the Court previously rejected in the M&O. Defendants contend that since they did not use the marks “as trademarks,” they are insulated from liability for trademark infringement. They argue that their use of the marks was not a “trademark use” and any use by them was permitted as a functional use. To the extent Defendants are attempting to raise a “fair use” defense, that argument is rejected. Defendants’ Amended Answer raised only a defense of continued use under 15 U.S.C. §1115(b)(5). Even assuming Defendants had properly raised a fair use defense, they do not prevail. A fair use defense is available to a defendant who establishes, as relevant here, that: the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark,…. of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party…. 15 U.S.C. §1115(b)(4). “Assessment of this defense thus requires analysis of whether a given use was ‘(1) other than as a mark, (2) in a descriptive sense, and (3) in good faith.’” JA Apparel Corp. v. Abboud, 568 F.3d 390, 400 (2d Cir. 2009) (quoting EMI Catalogue P’ship v. Hill, Holliday, Connors, Cosmopulos Inc., 228 F.3d 56, 64 (2d Cir.2000)). The focus is upon the “actual or proposed uses themselves.” JA Apparel, 568 F.3d at 400. Defendants have failed to establish the first element of the defense. The Second Circuit has “equated use…as a mark with the use of [a] term as a symbol to attract public attention.” JA Apparel, 568 F.3d at 401 (alterations in original; internal quotation marks and citation omitted). Here, Defendants not only used the so-called terms to attract attention to their goods, but affirmatively represent that the presence of the marks is the driving motivation for a consumer’s purchase of their goods. (See Defs. 56.1 17 (use of the FDNY and NYPD marks “is precisely why Defendants’ customers would purchase Defendants’ products.”)). Review of the evidence shows that Defendants’ actual uses of the marks were not descriptive, but rather they appropriated the marks to generate sales of unlicensed items. Defendants have not cited any precedent in which a defendant’s use of counterfeit marks was deemed a fair use. The Court finds that Defendants’ attempt to assert a fair use defense fails. Defendants’ remaining arguments do not pertain to the prior use issue, but rather challenge findings from the M&O on other points. They revisit their previous arguments that their use of the marks is functional and contest the M&O’s determination that they used counterfeit marks. These arguments are beyond the scope of this motion and should have been raised as a motion for reconsideration of the M&O, the time for which has long passed. Moreover, these arguments are meritless. Because Plaintiff is entitled to summary judgment on the prior use defense left open by the M&O and the other arguments advanced by Defendants all fail, the Court grants Plaintiff summary judgment on its claims concerning the NYPD Mark, NYPD Shield, FDNY Mark, and FDNY Shield marks for the specific classes of goods set forth in the section below. C. Violations by Class of Merchandise The City seeks damages for thirty-five (35) violations, one for each of the four marks in each class of goods for which that mark is registered — seven classes for the NYPD Mark, seven classes for the NYPD Shield, eleven classes for the FDNY Mark, and ten classes for the FDNY Shield. The claimed violation are broken down by class of merchandise7 as follows: Class of merchandise Marks registered 006/Metal goods NYPD Mark; NYPD Shield; FDNY Mark; FDNY Shield 009/Scientific goods NYPD Mark; NYPD Shield; FDNY Mark; FDNY Shield 014/Jewelry NYPD Mark; NYPD Shield; FDNY Mark; FDNY Shield 016/Decals FDNY Mark; FDNY Shield 018/Bags FDNY Mark; FDNY Shield 020 /Misc. NYPD Mark; NYPD Shield; FDNY Mark; FDNY Shield 021/Housewares NYPD Mark; NYPD Shield; FDNY Mark; FDNY Shield 024/Blanket throws FDNY Mark 025/Clothing NYPD Mark; NYPD Shield; FDNY Mark; FDNY Shield 026/Cloth patches FDNY Mark; FDNY Shield 028/Toys NYPD Mark; NYPD Shield; FDNY Mark; FDNY Shield Defendants deny having sold goods in all classes of merchandise alleged by the City. In light of the finding that there was potentially a prior use defense regarding uses of the marks on any merchandise other than clothing, the M&O did not address the evidence of violations from Defendants’ use of the marks on products in other classes. This Court now examines the record for evidence of violations of the City’s marks in the ten (10) classes other than Class 025/Clothing. Photographs and supporting affidavits were provided in support of the parties’ prior motions for summary judgment. See Declaration of Gerald Singleton in Support of Plaintiff’s Motion (“Singleton Decl”), ECF No. 43, and exhibits thereto; Declaration of Salvatore Piccolo in Support of Defendants’ Motion for Summary Judgment (“Piccolo Decl.”), ECF No. 54, and exhibits thereto. The Singleton Declaration attaches, inter alia8: copies of photographs of items purchased at the Cop Shop by some unidentified person that Singleton “recognize[s] to be counterfeit goods,” (id. Ex. H); copies of photographs of unlicensed merchandise observed by Singleton on October 2, 2017, (id. Ex. I); and copies of unlicensed merchandise observed by Singleton on October 6, 2017. (Id. Ex. J.) Piccolo testified that all the products depicted in Exhibits H, I, and J were made by Defendants. Singleton Decl.
