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Zino Davidoff SA v. CVS Corporation

United States Court of Appeals for the Second Circuit
571 F.3d 238 (2009)


Facts

Zino Davidoff SA (Davidoff) (plaintiff) produced a brand of colognes for men and women. Davidoff trademarked the “Cool Water” brand of its colognes. Davidoff had a quality assurance and anti-counterfeiting program. Davidoff placed a unique production code (UPC) on each fragrance bottle and package, and Davidoff used this system to identify when counterfeit versions of its fragrances were being sold. If a bottle or package was missing a UPC or had a fake UPC, Davidoff and investigators would know that it was a counterfeit bottle. The UPC also enabled Davidoff to track down bottles from specific shipments or producers if there was a quality issue with them. Davidoff had declined to sell its fragrances at CVS Corporation (CVS) (defendant). Instead, CVS obtained Davidoff’s fragrances from other distributors. In 1998 and 2005, Davidoff discovered that its products were being sold at CVS without authorization. CVS agreed that it would remove the counterfeit products and only obtain future products from an authorized distributor. However, in 2006, Davidoff discovered that CVS was still selling counterfeit fragrances and sued CVS. CVS agreed to stop selling counterfeit products but did not agree to stop selling the legitimate fragrances that had no UPC labels. Davidoff filed for a preliminary injunction to prevent CVS from selling any of its fragrances that had no UPC labels. The district court granted Davidoff’s motion, and CVS appealed.

Rule of Law

Issue

Holding and Reasoning (Leval, J.)

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