United States District Court, E.D. Pennsylvania
I.M. WILSON, INC., Plaintiff,
OTVETSTVENNOSTYOU "GRICHKO" et al., Defendants.
E.K. PRATTER UNITED STATES DISTRICT JUDGE.
defendants in this case-OOO Grichko, Nicolay
Grishko, and Grishko S.R.O.-are Russian and Czech entities
that manufacture and sell ballet shoes under the name
GRISHKO. They own the trademark GRISHKO everywhere in the
world, except for the United States. In this country,
Plaintiff I.M. Wilson, Inc. owns the GRISHKO trademarks and
has since the early 1990s when Mr. Grishko wrote two letters
that allowed I.M. Wilson to register the mark.
decades, I.M. Wilson was the defendants' exclusive
distributor in the United States and, until recently, the
parties had an amicable working relationship. In 2016, the
defendants terminated the exclusive licensing agreement under
which the parties were operating, and the exclusivity of the
relationship officially came to an end in March 2018. Around
that time, the defendants began selling products directly to
U.S. consumers, increasing their sales activities around the
holidays. This prompted I.M. Wilson to seek a preliminary
injunction to prevent the defendants from infringing on the
U.S. GRISHKO trademarks. The defendants countered by filing a
motion to dismiss or stay the case pending arbitration and
argue that this dispute is covered by an arbitration clause
in the parties' 1992 exclusive licensing agreement.
Memorandum addresses both motions in the order that they were
filed. The Court is prepared to grant I.M.
Wilson's Motion for Preliminary Injunction because I.M.
Wilson has demonstrated a sufficient likelihood of success on
the merits, irreparable harm, and that the equities balance
in its favor. The Court does so with some reticence, however,
because it is questionable whether a preliminary injunction
is in the public interest. Moreover, because it is by no
means inevitable that I.M. Wilson will prevail at the next
phase of this litigation, the Court will entertain
submissions on the issue of the amount of a bond to be posted
by I.M. Wilson in connection with issuance of a preliminary
injunction. The Court denies the Motion to Dismiss for
Failure to State a Claim or, Alternatively, Stay this Action
Pending Arbitration because the agreement containing the
arbitration clause was terminated, and this dispute does not
relate back to that agreement.
M. Wilson's Motion for Preliminary Injunction
nine months after seeing that the defendants were selling
ballet shoes in the United States, I.M. Wilson filed a Motion
for Preliminary Injunction on December 4, 2018, alleging that
the defendants are actively infringing on its GRISHKO
trademarks. Since then, there have been numerous rounds of
briefing (with and without oral arguments), several days of
hearings, post-hearing submissions, and two motions to
supplement the record. Upon consideration of all these materials,
the Court makes the following findings of fact and
conclusions of law.
Findings of Fact
Court held three days of hearings on the factual issues
underlying this preliminary injunction. Those hearings were
held on February 15, February 27, and April 5,
Wilson is a Pennsylvania corporation with its principal place
of business located in King of Prussia, Pennsylvania. I.M.
Wilson sells a variety of dance related products, including
ballet shoes and pointe shoes. Feb. 15 Hrg. Tr. 36:4-6;
Wilson is owned by Irene Wilson, a citizen of the United
States. Feb. 15 Hrg. Tr. 34:9-11. Ms. Wilson danced ballet in
her youth. Feb 27 Hrg. Tr. 13:20-14:16. She later obtained
degrees in Russian and Communications. Feb. 15 Hrg. Tr.
Defendant Obchtchestvo S Organtichennoy Otvetstvennostyou
"Grichko" (OOO Grichko) is a Russian company that
manufactures and sells dancewear products, including ballet
shoes and pointe shoes. Apr. 5. Hrg. Tr. 143:8-144:3.
Defendant Grishko Dance, S.R.O. is a company organized under
the laws of the Czech Republic. Apr. 5 Hrg. Tr. 141:15-23.
Grishko Dance obtains GRISHKO-branded products, including
ballet and pointe shoes, from 000 Grichko and sells these
products through the website grishkoshop.com. Apr. 5 Hrg. Tr.
Defendant Nicolay Grishko is a 60 percent owner of Defendant 000
Grichko and serves as the company's President and General
Director. Apr. 5 Hrg. Tr. 141:9-13. Mr. Grishko is a 100
percent owner of Defendant Grishko Dance and serves as that
company's co-administrator. Apr. 5 Hrg. Tr. 141:15-23.
The Parties' Initial Dealings
Grishko is married to a former Russian professional
ballerina, Tamara Grishko. Apr. 5 Hrg. Tr. 45:7-12. Mr. and
Mrs. Grishko had friends that profited from selling
Russian-made ballet shoes, which inspired Mr. Grishko to
manufacture and sell Russian-made ballet shoes. Apr. 5 Hrg.
1988, Mr. Grishko launched a "Kooperativ" (a
worker-owned enterprise that differed from the historically
state-owned enterprises of the past) because, at that time,
the U.S.S.R. did not allow for the formation of private
companies or private property ownership. Apr. 5 Hrg. Tr.
44:17-22. He named the Kooperativ "Tanyets" (the
Russian word for "dance"). Apr. 5 Hrg. Tr.
48:20-49:16. Kooperativ Tanyets was formed for the purpose of
manufacturing ballet and pointe shoes. Apr. 5 Hrg. Tr.
and every pair of GRISHKO ballet pointe shoes is hand crafted
in Russia by skilled cobblers and inspected by quality
control specialists who place unique identification numbers
inside the fold of the seam within the shoes. Ex. D26.
the late-1980s, Ms. Wilson wanted to start an import business
with the goal of importing goods from Russia. Feb. 27 Hrg.
Tr. 15:22-16:13. Ms. Wilson worked with Amtorg, an
international company that matches importers with exporters.
Feb. 27 Hrg. Tr. 16:18-22.
Wilson originally considered importing vodka, but Amtorg
ultimately connected her with Mr. Grishko to discuss
importing his ballet shoes. Feb. 15 Hrg Tr. 54:11-55:3; Feb.
27 Hrg. Tr. 16:18-25. Ms. Wilson made arrangements with
Amtorg to travel to Russia in 1990 with the goal of meeting a
ballet shoe manufacturer. Feb. 27 Hrg. Tr. 17:13-20.
While in Russia, Ms. Wilson met Mr. Grishko, and the parties
agreed that I.M. Wilson would sell Tanyets-manufactured shoes
in the United States under the brand name
"GRISHKO." Feb. 15Hrg. Tr. 54:11-56:9.
The Trademark License and Distribution Agreements Between the
April 25, 1990, I.M. Wilson entered into an exclusive
trademark license and distribution agreement (ETLDA) with the
Tanyets Kooperativ. Ex. D10.
agreement stated that:
[Grishko] has agreed to sell and [I.M. Wilson] has agreed to
buy ballet shoes, toe shoes and such other footwear, athletic
equipment or other items as the parties hereto may later
agree (the "Goods"), in quantity and assortment, at
prices and according to specifications, all as attached
hereto in Appendix I, which constitutes an integral part of
Ex. D10 at ¶ I.
1990 ETLDA granted I.M. Wilson an exclusive license to sell
Grishko products in the United States. Ex. D10 at ¶ XV.
In that regard, the agreement stated:
The Seller hereby grants the Buyer an exclusive right, for
the duration of this Agreement, to use the name
"Grishko" in connection with the sale of the Goods
in the United States. In consideration of such right, the
Buyer shall pay the Seller a royalty equal to 10% of the
value of each shipment of Goods.
Ex. D10 at ¶XV.
agreement remained in effect for one year and automatically
renewed for successive one-year terms unless a party provided
notice that it was terminating the agreement at least 90 days
prior to the "anniversary of [the] Agreement." Ex.
D10 at ¶ XVIII.
agreement further provided that I.M. Wilson was the exclusive
distributor of GRISHKO products in the United States during
the pendency of the agreement and for a period of one year
after the agreement's termination. Ex. D10 at ¶ XIV.
alterations or additions to the agreement were "valid
only if in writing and signed by persons duly authorized by
both parties." Ex. D10 at ¶ XVIII.
agreement further provided that:
Any dispute, controversy or claim arising out of or in
connection with this Agreement, or the breach, termination of
[sic] invalidity thereof, shall be finally settled by
arbitration in accordance with the Rules of the Arbitration
Institute of the Stockholm Chamber of Commerce. The tarbitral
[sic] tribunal shall be composed of three arbitrators the
place of the arbitration shall be Stockholm, Sweden. The
language(s) to be used in the arbitral proceeding shall be
English. This Agreement shall be governed by and construed in
accordance with the Laws of the Kingdom of Sweden.
Ex. D10 at ¶ XVII.
March 1, 1992, the parties entered into an identical
agreement that substituted Grishko, Inc. for the Tanyets
Kooperativ. Ex. D 11.
Ownership of the GRISHKO Trademark in the United
parties agreed that I.M. Wilson should register the trademark
in the United States. Feb. 15 Hrg. Tr. 58:20-60:6; Apr. 5
Hrg. Tr. 69:18-70:7.
July 24, 1992, Ms. Wilson completed a trademark application
for "dancing shoes" using the mark
"GRISHKO." Ex. D9 at pp. 42-43 of 138. In that
application, Ms. Wilson signed a declaration that stated she
"declares that she is properly authorized to execute
this application on behalf of the applicant; [and] she
believes the applicant to be the owner of the trademark
sought to be registered" Ex. D9 at 42-43 of 138.
August 5, 1992, Mr. Grishko signed a letter that stated,
"I agree that I.M. Wilson, Inc. is the owner of the
Trademark, GRISHKO and its goodwill in the United States of
America. I further consent to the use of my name in that
trademark." Ex. P2. That letter was signed by Mr.
Grishko, typed on OOO Grichko letterhead, and affixed with
the 000 Grichko seal. Ex. P2; Apr. 5Hrg. Tr. 98:6-19.
Wilson did not pay Mr. Grishko anything in return for the
rights conveyed by this letter. Feb. 27 Hrg. Tr. 49:20-22.
October 7, 1992, the U.S. Patent and Trademark Office refused
I.M. Wilson's trademark application. Ex. D9 at 35 of 138.
The examining attorney refused:
the registration because the mark consists of or comprises
matter which may falsely suggest a connection with Nikolai
Grishko, a renowned manufacturer of dancing shoes in Russia.
. . . While the evidence attached indicates that there may be
a connection between the applicant and Mr. Grishko, the
application file does not demonstrate this.
Ex. D9 at 35 of 138.
If the foreign manufacturer does own the mark in a foreign
country, the applicant must provide proof of its right to
register the mark in the United States. This proof may
consist of: (1) a written assignment of rights in the United
States by the foreign owner to the applicant, (2) a written
consent from the foreign owner to the applicant's
registration of the mark in the United States, or (3) a
written agreement between the parties designating the
applicant as owner in the United States. .. . If the
applicant cannot provide this proof, the examining attorney
must refuse registration because the applicant is not the
owner of the mark.
Ex. D9 at 36 of 138.
October 27, 1992, I.M. Wilson's counsel, Mr. Maleson,
filed a response in which he quoted the August 1992 letter
but inadvertently failed to attach a copy of the document.
Ex. D9 at 32-34 of 138.
January 15, 1993, the PTO issued a Final Action again denying
the registration. Ex. D9 at 28-30 of 138. The examining
attorney concluded that I.M. Wilson's response
"cannot be taken as an effectual resolution of the
issues raised by the refusal of registration. This is largely
because the documents referred to in the response were not
submitted." Ex. D9 at 28 of 138.
January 27, 1993, Mr. Maleson then submitted the August 1992
letter. Ex. D9 at 25-27 of 138.
PTO reviewed the August 1992 letter and concluded that it was
an "incomplete response to the Office action dated
January 15, 1993 because it does not include a written
consent to the registration of the name
'Grishko.'" Ex. D9 at 22-24 of 13 8 (emphasis in
original). Because the omission appeared to be inadvertent,
the PTO gave I.M. Wilson time to complete its response.
March 30, 1993, Mr. Grishko wrote a letter to I.M. Wilson
stating "In addition to the consent to I.M. Wilson, Inc.
that I previously granted on August 5, 1992, I hereby grant
I.[M]. Wilson, Inc. the right to register the trademark
GRISHKO in the U.S. patent and trademark office." Ex.
P3. This letter was on Grishko letterhead but did not include
the Grishko seal. Ex. P3. I.M. Wilson submitted this letter
to the PTO. Ex. D9 at 21 of 138. The PTO issued a notice of
publication. Ex. D9 at 15 of 138.
Although the August 1992 and March 1993 letters were drafted
in English, Mr. Grishko did not translate either into Russian
prior to signing them because they were "clear" and
he could "understand" them. Apr. 5 Hrg. Tr.
I.M. Wilson's July 1992 trademark application was
registered on November 30, 1993 as Registration No. 1, 807,
637 (hereinafter the '637 Registration). Ex. D9 at 7 of
Mr. Grishko Applies for Trademark Registrations
parties appear to have had an amicable relationship for the
next few years. On March 25, 1999, I.M. Wilson faxed a letter
to Mr. Grishko in which she stated, "I appreciate your
reassurances that no goods will be shipped into the United
States or Canada other than those destined for I.M. Wilson,
Inc. and certainly your word I trust." Ex. D46. She also
attached documents related to the '637 Registration,
including the August 1992 letter. Ex. D46.
May 20, 1999, Mr. Grishko applied to register the marks
GRISHKO (the stylized logo) and NIKOLAY GRISHKO (standard
character) in connection with "clothing, namely,
knitwear, underclothing, leotards and shaping; headgear,
shoes, pointe footwear, and slippers for use in modern, jazz,
folk and character dancing; and footwear for
gymnastics." Ex. D29 at 511-13.
PTO denied the application because the "mark, when used
on or in connection with the identified goods, so
resembles" the '637 Registration. Ex. D30 at 501.
The applications were deemed abandoned on March 8, 2000 and
May 23, 2000. Exs. D33 and 38.
I.M. Wilson's 2007 Federal Trademark
'637 Registration lapsed in 2003 and the PTO deemed the
mark abandoned. Ex. D9; Feb. 15 Hrg. Tr. 64:5-8; Feb. 27
Hrg. Tr. 70:13-71:2.
I.M. Wilson re-filed its trademark application for GRISHKO on
March 30, 2007. Ex. P1.
PTO denied the application because it needed a
"substitute specimen," inquired as to the
significance of the mark, and noted that if "the name
shown in the mark identifies a particular living individual,
the applicant must submit a written consent from that
individual, authorizing the applicant to register the
name." Ex. D13 at 199-201.
I.M. Wilson, via its attorney Mr. Maleson, submitted
follow-up materials. Ex. D13 at 194- 98. The PTO again denied
the application because the follow-up materials did not
address whether the mark was associated with the name of an
individual or the significance of the mark. Ex. D13 at
August 13, 2008, a new attorney for I.M. Wilson, Jennifer L.
Dean, submitted a request for reconsideration after final
action and submitted the August 1992 and ...