OPINION AND ORDER Before the Court is Flawless Style LLC (“Flawless”) and FloridaHusker LLC’s (“Husker”) (collectively, “Plaintiffs”) motion for a preliminary injunction to prevent Saadia Group LLC’s (“Defendant”) continued use of the GABRIELLE UNION trademark and any manufacturing, distributing, and/or selling of goods bearing that mark. ECF No. 17 (“Pls. Mot.”). For the reasons set forth below, Plaintiffs’ motion is GRANTED. I. BACKGROUND Plaintiffs are entities wholly owned by the actor and author Gabrielle Monique Union-Wade. ECF No. 21 (“Union Decl.”) 1. Through Husker, Union owns two registrations of the GABRIELLE UNION mark for use in various clothing items. Id. 11; see also ECF No. 11-1 (“Trademark Registrations”). In 2017, Union launched a GABRIELLE UNION fashion brand in partnership with the clothing retailer New York & Company. Union Decl. 12. In 2019, she expanded her line to Fashion to Figure, another retailer. Id. at 13. After their corporate parent went bankrupt, both New York & Company and Fashion to Figure were purchased by Defendant, which later acquired Lord & Taylor. Id. 14-15. In Summer 2021, through Flawless, Union negotiated a License and Spokesperson Agreement with Defendant, see ECF No. 20-1 (“Agreement”),1 permitting Defendant to use Union’s name, brand, likeness, and trademarks2 to relaunch the GABRIELLE UNION line at Lord & Taylor, New York & Company, and Fashion to Figure as long as Union first approved, inter alia, the merchandise’s design, packaging, and use of her mark and was paid certain guaranteed royalty payments.3 Union Decl.
16, 18, 20; see also Agreement §§3, 7, 8. The line was released at New York & Company and Lord & Taylor in September 2021 and at Fashion to Figure in March 2022. ECF No. 21-1 (“Press Coverage”).4 Beginning in May 2022, Defendant failed to make royalty payments and other professional fees owed under the Agreement. Union Decl. 23. On February 9, 2023, Flawless warned Defendant that, “[u]nless such non-compliance is cured within fifteen (15) business days,…the Agreement may be terminated.” ECF No. 20-2 (“Notice of Breach”) at 3. After Defendant did not respond and failed to cure its breach, Flawless wrote again on March 7, 2023, notifying Defendant that it had “failed to cure” its “material breach of the Agreement” and that, pursuant to Section 18(a), the Agreement was “terminated, effective immediately.” ECF No. 20-3 (“Termination Letter”) at 1. Rather than “immediately ceas[ing]” the sale of GABRIELLE UNION merchandise, as required by Section 18(b)(i) of the Agreement, Defendant continued selling Collection Merchandise through its websites — at up to seventy percent markdowns. Plaintiffs filed this action on March 20, 2023, alleging breach of contract and seeking an injunction to prevent Defendant’s ongoing sale of Collection Merchandise. ECF No. 1 (“Compl.”). On April 6, 2023, Plaintiffs amended their complaint to add, inter alia, two claims for trademark infringement. ECF No. 11 (“Am. Compl.”). That same day, counsel for Plaintiffs wrote to counsel for Defendant, stating that Plaintiffs would move for a temporary restraining order and preliminary injunction if, by 5:00 p.m. the following day, Defendant did not provide “verifiable confirmation that all such sales have ceased.” ECF No. 20-4 (“Apr. 6, 2023 Email”). On Friday, April 14, 2023, Plaintiffs’ counsel wrote a second time, informing opposing counsel that Plaintiffs would move for injunctive relief on the coming Monday. ECF No. 20-5 (“Apr. 14, 2023 Email”). On Monday, April 17, 2023, Plaintiffs moved for a temporary restraining order and preliminary injunction. Pls. Mot. Initially, Defendant “consent[ed] to having a TRO and preliminary injunction placed throughout the pendency of this action.” ECF No. 26 at 1 (“Letter Resp.”). During a hearing on April 19, 2023, however, it became clear that the parties did not, in fact, agree on the terms of an injunction. Plaintiffs and Defendant submitted competing proposed orders, and on April 21, 2023 at 6:27 p.m., the Court entered a temporary restraining order. The temporary restraining order prohibited Defendant from using the GABRIELLE UNION mark, including on its websites, and from selling Collection Merchandise, unless Defendant first removed “labels, tags[,] packaging and/or devices” “bearing the Artist Identification.” ECF No. 31 (“TRO”). Defendant then opposed Plaintiffs’ application for a preliminary injunction. See ECF No. 35 (“Opp. Br.”). During a proceeding on May 3, 2023, the Court heard argument on Plaintiffs’ application. At the conclusion of that proceeding, the temporary restraints were extended, for good cause, until May 19, 2023, and again on May 19, at 3:58 p.m., until May 26, 2023, at 9:00 p.m. II. DISCUSSION “A party seeking a preliminary injunction must demonstrate: (1) a likelihood of success on the merits or sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the plaintiff’s favor; (2) a likelihood of irreparable injury in the absence of an injunction; (3) that the balance of hardships tips in the plaintiff’s favor; and (4) that the public interest would not be disserved by the issuance of an injunction.” Benihana, Inc. v. Benihana of Tokyo, LLC, 784 F.3d 887, 895 (2d Cir. 2015) (quotation marks and alteration omitted) (citing Salinger v. Colting, 607 F.3d 68, 79-80 (2d Cir. 2010)). Plaintiffs have satisfied this standard. A. Likelihood of Success Plaintiffs bring two trademark claims: one, under 15 U.S.C. §1114, for infringement, and a second, under 15 U.S.C. §1125(a), for false designation of origin. 1. The Expiration of Defendant’s License When a licensor terminates a trademark licensing “[a]greement[] in accordance with [its] terms,” the continued use of the mark is “unlicensed and unlawful under the Lanham Act.” Krispy Kreme Doughnut Corp. v. Satellite Donuts, LLC, 725 F. Supp. 2d 389, 393 (S.D.N.Y. 2010) (enjoining franchisee’s use of franchisor’s mark); see also Sunward Elecs., Inc. v. McDonald, 362 F.3d 17, 25 (2d Cir. 2004) (“The continued use by the defendants of a licensed trademark after the Franchise Agreement had been terminated constitutes…trademark infringement.” (quoting Baskin-Robbins Ice Cream Co. v. D & L Ice Cream Co., Inc., 576 F. Supp. 1055, 1060 (E.D.N.Y. 1983)). Under the Agreement, “[e]ither party” could terminate it “immediately upon written notice in the event of the other party’s material breach…and failure to cure such breach within fifteen (15) business days after receipt of written notice from the non-breaching party.” Agreement §18(a). If the Agreement was terminated for reasons other than Defendant’s material breach, Defendant retained sell-off rights allowing it, for six months, “to complete manufacture of Collection Merchandise then in process, and to continue to sell in the Territory its existing inventory of Collection Merchandise then completed” or already in stock, as long as the merchandise “compl[ied] with the quality control provisions and written approvals.” Agreement §18(b)(ii). Otherwise, Defendant was to “immediately cease and cause the cessation of all of its activities…respecting the Collection and any Materials incorporating the Artist Identification.” Agreement §18(b)(i). Rather than dispute its alleged material breaches of the Agreement, Defendant argues that Plaintiffs materially breached first (along with breaching their covenant of good faith and fair dealing), thereby terminating the Agreement and triggering Defendant’s contractual sell-off rights. See Agreement §18(b)(ii). Specifically, Defendant argues that Plaintiffs materially breached when they and Union (1) “would continuously and unjustifiably delay giving…approvals and consistently make unreasonable denials and unreasonable modifications,” delaying the launch of the Fashion to Figure website and “caus[ing] extensive loss[es],” Opp. Br. 5-6; (2) “failed to promote the Lord & Taylor website” and to make the requisite “monthly social posts,” id. at 6; (3) “abused the licensing agreement” by using manicurists, hair stylists, and photographers who charged high rates, costing Defendant “hundreds of thousands of dollars,” id. at 7-8; and (4) “refuse[d] to work with certain individuals…not based on their merit and unrelated to achieving the objective at hand,” id. at 8. Defendant’s evidence for these allegations borders on nonexistent.5 Indeed, its purported support only undermines Defendant’s claims. First, all of the email communications filed as Exhibits A, B, and D to the Declaration of Jack Saadia, Defendant’s principal, ECF No. 33 (“Saadia Decl.”), reflect Union’s unavailability due to competing “professional commitments.”6 Under the Agreement, however, “[i]n no event w[ould] Licensor or Artist be deemed in breach…due to Artist’s unavailability…as a result of a professional commitment.” Agreement §3(i)(i). Second, far from showing that Union was unavailable or had delayed in giving approvals, the email from Sarah Cohn of New York & Company to Jack Saadia at Exhibit C reflects that Union had “spent more than the allotted time,” resulting in Defendant “g[etting] the approvals that [it] needed.” ECF No. 33-3 (“Apr. 5, 2022 Email”). Third, Defendant provides no evidence that the fees included in the professional services invoices attached as Exhibit E were “exuberant” (other than Mr. Saadia’s say so), Saadia Decl. 25, let alone evidence that the fees exceeded what is “customary in the commercial industry,” Agreement §4(j).7 Of note, Defendant fails to proffer any evidence of having notified Plaintiffs or Union of any alleged breaches prior to the filing of this litigation. In fact, Defendant does not seem to have asserted any breaches until after the temporary restraining order issued. During oral argument on May 3, 2023, counsel for Defendant averred — for the first time — that it had indeed “expressed” such “complaints” to Plaintiffs, though perhaps “mostly verbally.” ECF No. 46 (“Prelim. Inj. Hr’g Tr.”) at 7. Even if Defendant had done so, a “verbal” notice is insufficient to terminate the Agreement. See Agreement §18(a) (“Either party may terminate this Agreement immediately upon written notice in the event of the other party’s material breach…and failure to cure such breach within fifteen (15) business days.” (emphasis added)). Under New York law, subject to exceptions not relevant here, “where contracting parties agree on a termination procedure, the procedure will be enforced as written.” E. Empire Constr. Inc. v. Borough Constr. Grp. LLC, 200 A.D.3d 1, 5 (N.Y. App. Div. 1st Dep’t 2021) (citing Gen. Supply & Constr. Co. v. Goelet, 241 N.Y. 28, 34 (1925)). Also on May 3, 2023, Defendant argued for the first time that an evidentiary hearing “is necessary because…there are various breaches…[s]o we need to have an evidentiary hearing with respect to…the breach on the part of the licensor.” Prelim. Inj. Hr’g Tr. 18-19. That application is denied. To start, Defendant does not “explain how additional oral testimony by its witnesses or additional information that might be gleaned from an evidentiary hearing would materially change the record.” 24 Seven, LLC v. Martinez, No. 19 Civ. 7320 (VSB), 2021 WL 276654, at *13 (S.D.N.Y. Jan. 26, 2021). Regardless, “[a]n evidentiary hearing is not required when the relevant facts…are not in dispute…or when the disputed facts are amenable to complete resolution on a paper record.” Charette v. Town of Oyster Bay, 159 F.3d 749, 755 (2d Cir. 1998) (citations omitted). Here, no relevant facts are in dispute. Instead, the scant evidence adduced by Defendant simply does not show what Defendant claims. Even if it did, an evidentiary hearing still would not be warranted. As Defendant concedes, in the face of Plaintiffs’ supposed breaches, Defendant elected to continue, rather than terminate, the Agreement. See Caronia v. Hustedt Chevrolet, Inc., No. 05 Civ. 3526 (DRH) (MLO), 2009 WL 3615289, at *2 (E.D.N.Y. Oct. 30, 2009) (“[B]ecause the question presented to the court is solely…a question of law, an evidentiary hearing is not required.” (citing Charette, 159 F.3d at 755)). It is legion that, “[w]here a contract is broken in the course of performance, the injured party has a choice presented to him of continuing the contract or of refusing to go on.…If the injured party chooses to go on, he loses his right to terminate the contract because of the default.” Emigrant Indus. Sav. Bank v. Willow Builders, 290 N.Y. 133, 144 (1943) (cleaned up); see also ESPN, Inc. v. Off. of the Comm’r of Baseball, 76 F. Supp. 2d 383, 387-88 (S.D.N.Y. 1999) (collecting cases). In other words, Defendant may not have its cake and eat it too. According to Defendant’s own evidence, it intentionally elected to accede to Union’s demands and continue — rather than terminate — the Agreement, in order “to preserve the peace and the relationship with” Plaintiffs and Union. Saadia Decl.
