Coach, Inc. v. Sapatis, et al.

Coach, Inc. v. Sapatis, et al.   12-cv-506-PB     1/31/14
                  UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF NEW HAMPSHIRE


Coach, Inc., et al.

     v.                                      Civil No. 12-cv-506-PB
                                             Opinion No. 

Peter J. Sapatis, et al.



                       MEMORANDUM AND ORDER


     This case arises from the sale of counterfeit goods by

third party vendors at a flea market in Londonderry, New

Hampshire.   Coach, Inc. and Coach Services, Inc., purveyors of

designer handbags and other personal goods, have sued Peter J.

Sapatis, Londonderry Marketplace, LLC, Alaina E. Paul, and TABA

Enterprises, LLC, seeking injunctive relief and damages based on

alleged violations of federal and state law relating to

trademarks, copyrights, and unfair business practices.       Sapatis

and Londonderry Marketplace move for summary judgment.       I grant

the motion in full with respect to Londonderry Marketplace and

grant it in part and deny it in part with respect to Sapatis.




                           I.   BACKGROUND

    Most of the evidence presented by Sapatis and Londonderry

Market concerns events surrounding Sapatis's sale of the Flea
Market to Paul and TABA in February 2008.     In contrast, nearly

all the evidence presented by Coach1 relates to events occurring

after the sale.

A.      Evidence Presented by Sapatis and Londonderry Market

        Peter Sapatis has owned a large field and adjacent

residence at 5 Avery Road in Londonderry, New Hampshire since at

least 1991, when he established the Londonderry Flea Market as a

sole proprietorship at that location.     Doc. No. 30-2.     The Flea

Market operates nearly every weekend from April through October.

In 2003, Sapatis formed Londonderry Marketplace, LLC, through

which he operated the Flea Market until 2008.     Sapatis has

always been Londonderry Marketplace's sole owner.     

        On February 15, 2008, Sapatis's daughter, Alaina Paul, and

Londonderry Marketplace executed an Asset Purchase Agreement and

bill of sale that transferred ownership of the Flea Market from

Londonderry Marketplace to Paul for $100,000.     Doc. Nos. 30-3,

30-4.     The Agreement specifies that Paul will pay $100,000 to

Londonderry Marketplace over a ten-year period, with interest

accruing on the outstanding balance.     Doc. No. 30-3.     Paul

contemporaneously assigned her entire interest in the Flea


1
  Coach, Inc. and Coach Services, Inc. have referred to
themselves collectively as "Coach" throughout the pleadings.        I
follow their lead here.
                                2
Market to TABA Enterprises, LLC, a company owned solely by Paul.

Doc. Nos. 30-2, 30-5.

     The sale of the Flea Market did not include the land upon

which it operates.   Doc. Nos. 30-3, 30-4.     Paul and Sapatis

contemporaneously executed a five-year commercial lease of all

the land at 5 Avery Road exclusive of Sapatis's home and the

surrounding three acres.     Doc. No. 30-6.   The lease states that

the property may only be used for the operation of an outdoor

flea market.   It specifies $36,000 in annual rent, made in two

equal payments each year on the first of June and November.       

     Sapatis continued operating the Flea Market's concession

stand through the end of 2008, and then retired from the Flea

Market.   Doc. Nos. 30-2, 30-3.   Londonderry Marketplace ceased

doing business in 2009, ceased filing annual reports with the

New Hampshire Secretary of State in 2011, and was

administratively dissolved.    Doc. No. 30-2.    Sapatis has never

been an employee of Paul or TABA or an employee or agent of any

vendor at the Flea Market.    Rather, TABA employs Linda Morrow to

assist Paul with the Flea Market's operations.      Since 2008, all

vendors have contracted exclusively with TABA, Sapatis has not

derived any direct income from the Flea Market or its vendors,

and Sapatis has not conducted any advertising for the Flea

                                   3
Market.   He continues to volunteer his time at the Flea Market

because he wants his daughter's business to succeed, but he

claims that he has had nothing whatsoever to do with the alleged

sale of counterfeit goods at the Flea Market.       

B.   Evidence Presented by Coach

     Since the sale of the Flea Market to Paul and TABA in 2008,

Paul has paid Sapatis $12,000 each year toward the outstanding

balance she owes him - currently $40,000 - although she is

unsure exactly how and when these payments have been made.        Doc.

Nos. 36-2, 36-4.   Each of Paul's payments is completely offset

by an annual gift of $12,000 that Sapatis makes to Paul.         

None of these transactions have been recorded, and interest has

never accrued on the outstanding balance.       Doc. No. 36-4.    The

last time that Sapatis looked at the Asset Purchase Agreement

was when it was executed in 2008.      

     The $36,000 in annual rent specified in Paul's lease is

paid to Sapatis out of the admission fees that customers pay to

enter the Flea Market and the rent that vendors pay to operate

their stands.   Doc. No. 36-2.   Sapatis, who keeps the Flea

Market's books, pays himself rent out of these proceeds and

records the payments on Paul's behalf.       Doc. Nos. 36-2, 36-4.

Paul has no involvement in the payments other than reviewing the

                                   4
records with Sapatis at the end of the year.         Sapatis claims

that he receives rent payments in the form of both cash and

personal checks that he writes to himself in Paul's name,

whereas Paul claims that the rent payments are made solely in

cash.     

   Contrary to the lease terms, the payments are not

made in two equal annual installments because "we've changed to

whatever is okay at the time."      Doc. No. 36-2.

        Paul alleges that TABA has owned and managed the Flea

Market since February 15, 2008 and that she receives mail for

the Flea Market at 5 Avery Road.      

   Sapatis continues to

reside at that address with his girlfriend Morrow, however,

while Paul resides in Manchester.      Doc. No. 36-4.     The Flea

Market's business office is located in Sapatis's home.        Doc.

Nos. 36-2, 36-4.      It houses the Flea Market's telephone line as

well as its vendor policy manuals for 2010 and 2011, which are

each signed "Pete Sapatis."2     Id.; see Doc. No. 36-5.

        Sapatis claims that he has retired and that Morrow is

primarily responsible for the Flea Market whenever Paul is

otherwise occupied, but Paul claims that Sapatis has never


2
  Sapatis has not physically signed these policy manuals; rather,
"Pete Sapatis" is typed at the bottom of what appears to be the
final page of each manual, immediately below a space where the
documents' creator would be expected to sign. See Doc. No. 36-
5.
                                5
retired and continues to assist her alongside Morrow in the

operation of the Flea Market.   Doc. Nos. 36-2, 36-4.    Sapatis

buys supplies for the Flea Market; maintains the grounds;

provides business advice to Paul; answers calls on the Flea

Market's main telephone line; keeps the books for the Flea

Market (including forecasting future expenses and determining

the Flea Market's liquidity needs); shows potential vendors

available spaces for rent in the Flea Market; mediates arguments

amongst vendors, customers, and the police, including arguments

concerning the sale of counterfeit goods; and circulates through

the Flea Market "all weekend" to keep aisles clear, inform

vendors of Flea Market policies, maintain relationships with

long-term vendors, and collect vendors' rent payments (including

cash and checks made payable to either TABA or Sapatis himself).

In short, Sapatis does "[a]lmost anything he thinks he needs to

help [Paul] with," whether at Paul's direction or not.     

      On June 26, 2011, two private investigators working for

Coach, Andrea Powers and Michael Surette, arrived at the Flea

Market and asked to speak to its owner.   Doc. Nos. 35, 36-4.

Sapatis was summoned and Powers and Surette informed him that

counterfeit Coach products were being sold at the Flea Market.

   Sapatis immediately called Morrow and a Londonderry police

                                 6
officer, who accompanied Powers and Surette while they inspected

the Flea Market, purchased a number of counterfeit Coach

products from vendors, and served these vendors with cease and

desist orders.    Doc. Nos. 36-1, 36-2, 36-4.      Paul believes that

she was working at the Flea Market's concession stand at the

time "[b]ecause that's what I usually do."       Doc. No. 36-2.

     On August 2, 2011, Coach sent a letter to the

"Owner/Manager[,] Londonderry Flea Market" alleging that

counterfeit Coach products were being sold by Flea Market

vendors and that those responsible for the Flea Market could be

held liable if they failed to stop this unlawful activity.        Doc.

No. 36-1.     Sapatis received this letter and attempted to contact

Coach's counsel to seek assistance in complying with its

instructions, although Sapatis is unsure whether he actually

spoke with a representative of Coach at this time.        Doc. No. 36-

4.   In September 2011, Sapatis called Surette "on behalf of the

flea market" and offered to pay him to conduct another

inspection.    Doc. Nos. 35, 36-4.     After conducting this

inspection without payment on October 9, 2011, Surette informed

Sapatis that the Flea Market was "clean, but not to say that

you're going to stay th[at] way."       

   Sapatis responded that

he "eventually would like to get out of the flea market

                                   7
business."     Doc. No. 35.   Surette assumed that Sapatis was still

involved in the Flea Market's management and operation.        

Powers subsequently sent a letter to "Peter Sepatis [sic][,]

Owner[,] Londonderry Flea Market" on November 9, 2011 containing

trademark images for a variety of brands to assist him in

identifying counterfeit products at the Flea Market.        Doc. No.

36-7.     Sapatis then called Powers to obtain additional copies of

the letter, which he planned to distribute to vendors.        Doc. No.

36-4.

        On April 29, 2012, Surette visited the Flea Market a third

time and purchased counterfeit Coach products from five vendors.

Doc. Nos. 36-2, 36-3.    After this unannounced inspection,

Surette spoke with Sapatis about the ongoing sale of counterfeit

products at the Flea Market.     Doc. No. 36-2.     On May 14, 2012,

Coach mailed another letter, similar in content to the August

2nd letter, to the "Owner/Manager[,] Londonderry Flea Market".

Doc. No. 36-3.     Paul received this letter and shared it with

Sapatis and Morrow.     Doc. Nos. 36-2, 36-4.   Sapatis then called

Coach's counsel seeking "help in taking care of this

counterfeiting problem."      Doc. Nos. 34, 36-4.   Neither Paul nor

anyone associated with TABA ever communicated with Coach or any



                                    8
of its representatives prior to Coach suing Paul and TABA in

June 2013.   Doc. No. 36-2.

     During discovery, TABA produced numerous email messages

sent from the Flea Market's main email address between February

27, 2011 and August 7, 2013.      Doc. No. 36.     Six hundred fifty-

five of these messages identified Sapatis as the sender, whereas

only forty-five messages originated from Paul.         Id.; see, e.g.,

Doc. Nos. 36-8, 36-9, 36-10, 36-11.      In response to one message

from a customer asking whether counterfeit products of a

particular brand were for sale at the Flea Market, Sapatis

responded on June 26, 2012 that they were not, but encouraged

the customer to visit nonetheless because "[y]ou will most

likely find something you want to have!"      Doc. No. 36-9.



                      II.     STANDARD OF REVIEW

     Summary judgment is appropriate when the record reveals "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).   An issue is considered genuine if the evidence allows a

reasonable jury to resolve the point in favor of the nonmoving

party, and a fact is considered material if it "is one ^that

might affect the outcome of the suit under the governing law.'"

                                    9
United States v. One Parcel of Real Prop, with Bldgs. , 

, 204 (1st Cir. 1992) (quoting Anderson v. Liberty Lobby,

Inc., 

 (1986)).    In ruling on a motion for

summary judgment, I examine the evidence in the light most

favorable to the nonmoving party.    Navarro v. Pfizer Corp., 

 (1st Cir. 2001).

     The party moving for summary judgment bears the initial

burden of identifying the portions of the record it believes

demonstrate an absence of disputed material facts.    Celotex

Corp. v. Catrett, 

 (1986).    In determining what

constitutes a material fact, "we safely can ignore ^conclusory

allegations, improbable inferences, and unsupported

speculation.'"   Carroll v. Xerox Corp., 

 (1st

Cir. 2002) (quoting Medina-Munoz v. R.J. Reynolds Tobacco Co.,

 (1st Cir. 1990)).



                          III.    ANALYSIS

A.   Claims Against Sapatis

     Coach brings eight claims against Sapatis: (1) contributory

trademark counterfeiting3 (

); (2) contributory


3
  The first two counts of Coach's amended complaint,
"contributory trademark counterfeiting" and "contributory
trademark infringement", arise under the same section of the
                                10
trademark infringement (

); (3) contributory

trade dress infringement (

(a)); (4) contributory

false designation of origin and false advertising (

(a)); (5) contributory trademark dilution (

(c)); (6) contributory copyright infringement (

); (7) state common law trademark infringement; and (8) state

common law unfair competition.   I first analyze the claims

arising under federal law before turning to the state law

claims.

     1.   Federal Law Claims (Counts I through VI)

     Sapatis moves for summary judgment on Counts I through VI

based solely on his contention that ownership and lease of the

land upon which the Flea Market operates, without any

significant involvement in the Flea Market's operations or the

Lanham Act, see 

, and courts use the two terms
interchangeably. See Coach, Inc. v. Farmers Mkt. & Auction, 

 (D. Md. 2012); Roger Cleveland Golf Co.,
Inc. v. Prince, No. 2:09-2119-MBS, 

, at *1
 (D.S.C. Mar. 30, 2012); Feiya Cosmetics, LLC v. Beyond Beauty
Int'l, LLC, No. C-10-00967-JCS, 

, at *10 (N.D.
Cal. Aug. 29, 2011), rep. & rec. adopted. No. C-10-0967-PJH,

 (N.D. Cal. Sept. 29, 2011); Marvisi v. Greenwich
Ins. Co., No. 04-CV-6733 (TPG), 

, at *2 (S.D.N.Y.
May 23, 2006). I therefore consider Counts I and II
collectively under the more frequently used term "contributory
trademark infringement." See, e.g., Sony Corp. of Am. v.
Universal City Studios, Inc., 

 (1984)
 (Blackmun, J., dissenting) (citing Inwood Labs., Inc. v. Ives
Labs., Inc., 

 (1982) (White, J., concurring in
the result)).
                                 11
conduct of its vendors, is insufficient to hold him

contributorially liable under any legal theory.    Coach counters

that undisputed evidence of Sapatis's actual involvement with

the Flea Market clearly establishes a genuine issue of material

fact with respect to each cause of action.4   I agree with Coach.

          a.   Contributory Trademark Infringement (Counts I, II)

     In Inwood Laboratories, Inc. v. Ives Laboratories, Inc.,

the Supreme Court interpreted section 32 of the Lanham Act, 

, to prohibit contributory trademark infringement

by those who facilitate, rather than engage directly in,

trademark infringement as defined by the Act.     

(1982).   The Court held that a provider of a product who (1)

"intentionally induces another to infringe a trademark" or (2)

"continues to supply its product to one whom it knows or has

reason to know is engaging in trademark infringement" is

"contributorially responsible for any harm done as a result of

the deceit."   Id.; see also Getty Petroleum Corp. v. Aris Getty,

Inc., 

 (1st Cir. 1995) (sole First Circuit


4
  For purposes of this motion for summary judgment, the parties
dispute only Sapatis's degree of control over the Flea Market
and its vendors, not the separate but related issues of his
notice of the vendors' infringing conduct and the sufficiency of
any steps taken to stop it. Cf. Coach, Inc. v. Gata Corp., No.
10-CV-141-LM, 

, at *7-10 (D.N.H. June 9, 2011) .
I take no position concerning the latter issues at this time.
                                12
decision referencing the Inwood standard).   As the Ninth Circuit

later explained, the contributory liability doctrine in

trademark and copyright law is "an outgrowth of enterprise

liability . . . and imposes liability where one person knowingly

contributes to the infringing conduct of another."   Fonovisa,

Inc. v. Cherry Auction, Inc., 

 (9th Cir. 1996)

(citing Demetriades v. Kaufmann, 

 (S.D.N.Y.

1988); 3 Melville Nimmer & David Nimmer, Nimmer on Copyright §

1204[a][2], at 1275 (1995)); see also Hard Rock Cafe Licensing

Corp. v. Concession Servs., Inc., 

, 1148-49 (7th

Cir. 1992) (citing David Berg & Co. v. Gatto Int'l Trading Co.,

 (7th Cir. 1989); Restatement (Second) of Torts

§ 877(c) & cmt. d (1979)) ("[W]e have treated trademark

infringement as a species of tort and have turned to the common

law to guide our inquiry into the appropriate boundaries of

liability.").   Although the Inwood standard for contributory

trademark infringement expressly references only products -

unsurprising since that case concerned the sale of products used

to infringe a third party's trademark - the doctrine has since

been expanded to govern the activities of service providers as

well, including those who operate flea markets where vendors

sell counterfeit goods.   See, e.g.. Coach, Inc. v. Goodfellow,

                                13


 (6th Cir. 2013); Fonovisa, 

;

Hard Rock, 955 F.2d at 1148.

     Coach has not alleged that Sapatis intentionally induced

vendors to infringe its trademarks under Inwood's first prong.

Rather, Coach claims that Sapatis violated Inwood's second prong

by continuing to provide his services to particular vendors whom

he knew or had reason to know were infringing Coach's

trademarks.   Doc. No. 26; see Inwood, 

.

     To date, no court of appeals has held a defendant who was

not a flea market's owner contributorially liable for trademark

or copyright infringement arising from a vendor's unlawful

conduct at the site.   See Goodfellow, 

; Fonovisa,

; Hard Rock, 955 F.2d at 1148.   Furthermore, the

parties have directed me to no lower-level decision that has

found liability under such circumstances.   Sapatis's argument -

that mere ownership of the land, without any concomitant

ownership interest in the Flea Market, precludes contributory

liability - is thus not unreasonable at first glance.     See Doc.

No. 30-1.

     The cases make abundantly clear, however, that the relevant

inquiry is not whether the defendant owned the venue where

trademark infringement took place, but whether the defendant had

                                14
sufficient control over the individuals directly engaging in

such infringement.   See Lockheed Martin Corp. v. Network

Solutions, Inc., 

 (9th Cir. 1999) (citing

Fonovisa, 

; Hard Rock, 955 F.2d at 1148-49) ("[W]e

consider the extent of control exercised by the defendant over

the third party's means of infringement. . . .    Direct control

and monitoring of the instrumentality used by a third party to

infringe the plaintiff's mark" is sufficient to meet the Inwood

standard).   Sapatis initially attempts to escape this conclusion

by relying on an unpublished decision in which a flea market

landlord escaped contributory liability.    See Doc. No. 30-1

(citing Malletier v. The Flea Mkt., Inc., 

, at *3

(N.D. Cal. June 10, 2009) ("No case supports the proposition

that a property owner may be liable for contributory trademark

infringement if it only leases property to a separate and

distinct entity, which in turn operates a flea market and rents

space to a vendor, which in turn infringes trademarks.      Property

ownership alone does not establish that Defendant exercised

control over the sale of the infringing products.")).    But as

Coach makes exceedingly clear, Sapatis's activities went far

beyond "only" owning the land and leasing it to a separate

entity.   See Doc. No. 33-1.   Ultimately, Sapatis concedes that

                                 15
the defendant's degree of control over the infringer - rather

than his or her nominative status as owner, lessor, or lessee -

is the determinative factor.    See Doc. No. 30-1 ("The key issue

in determining whether to hold a service provider liable for

contributory trademark infringement under the second Inwood

standard is whether the defendant can exercise control over the

direct infringer.").

       The parties cite a handful of cases that serve as useful

guideposts in determining the degree of control required for

contributory liability to attach.     In Goodfellow, the Sixth

Circuit held that a flea market owner and operator who

"provide[d] . . . rental booths and storage units for vendors"

was contributorially liable when he had reason to know of

trademark infringement committed by some vendors.     

.    Finding "little difficulty in holding that the allegations

in this case are sufficient to show" control, the Ninth Circuit

noted in Fonovisa that "it would be difficult for the infringing

activity to take place in the massive quantities alleged without

the support services provided by the [flea market].     These

services include, inter alia, the provision of space, utilities,

parking, advertising, plumbing, and customers."     

.

In a recent case in which Coach successfully sued a different

                                 16
New Hampshire flea market for contributory trademark

infringement. Judge McCafferty noted that "[t]he issue of

proximity [between the defendant and the infringing vendors] . .

. is related to the issue of control, which is a key component

of the analysis."   Coach, Inc. v. Gata Corp., No. 10-CV-141-LM,

, at *7 (D.N.H. June 9, 2011) . Accordingly, she

found that "the operator of a flea market that rents spaces to

vendors exercises substantial[] . . . control over potential

direct infringers . . . ."   

.

     In contrast, the Seventh Circuit in Hard Rock discussed a

useful hypothetical in which a "temporary help service . . .

might not be liable if it furnished [a flea market vendor] the

workers he employed to erect [the] stand" from which the vendor

sold counterfeit goods.   955 F.2d at 1148-49.   Such minimal

control as that exercised by the temporary worker over an

infringing vendor is analogous to the negligible control

exercised by companies that provide services over the internet,

such as credit card payment processing or registration of domain

names, to third parties who publish infringing content on web

sites utilizing those services.    See, e.g.. Perfect 10, Inc. v.

Visa Int'l Serv. Ass'n, 

 (9th Cir. 2007)

(payment processing); Lockheed Martin, 

 (domain

                                  17
name registration).   The defendants' attenuated relationship

with, and control over, the unlawful conduct in these cases

absolved them of contributory liability.

     Viewing the evidence in the light most favorable to Coach,

I conclude that Sapatis exercised sufficient control over the

Flea Market and its vendors during the time period in question

for a reasonable jury to hold him contributorially liable for

the vendors' conduct.5   Coach's allegations strongly support the

inference that Sapatis's contribution to the Flea Market's

operations "increased the level of infringement by providing a

centralized place . . . where infringing works could be

collected, sorted, found, and bought, sold, or exchanged."      See

Visa, 

; see also Perfect 10, Inc. v. Amazon.com,

Inc., 

 (9th Cir. 2007) (noting the

significance in Fonovisa that the defendant "had the ability to

identify and police infringing activity by patrolling its

premises").   A jury could reasonably believe that Sapatis

essentially was the Flea Market in the eyes of customers (who

received the bulk of their email responses from Sapatis, had


5
  Even if I were to consider the evidence in the light most
favorable to Sapatis, I would likely reach the same conclusion.
That is because many of the undisputed facts forming the basis
of Coach's claims are taken directly from Sapatis's own
deposition testimony. See Doc. No. 36-4.
                                18
their phone calls answered by Sapatis, witnessed him patrolling

the Flea Market "all weekend", and resolved their arguments with

vendors); in the eyes of vendors (who were shown spaces to rent

by Sapatis, were informed by Sapatis about Flea Market policies

that had been developed by Sapatis, maintained longstanding

relationships with Sapatis, and sometimes wrote their rent

checks directly to Sapatis); and in the eyes of third parties

such as Coach (who, until this lawsuit, consistently referred to

Sapatis as the Flea Market's owner without ever being corrected

by Sapatis or anyone else).   Many vital aspects of the Flea

Market's operations were also controlled by Sapatis, including

bookkeeping, groundskeeping, provision of supplies, and

financial decision-making.    Although Sapatis claims to have

received no direct income from the Flea Market or its vendors,

this seriously misrepresents the fact that he personally drew

rent payments directly from customer admission fees and vendor

rent payments, on his own schedule and without Paul's

involvement.   Even if Paul and TABA technically owned the Flea

Market and contracted with its vendors, a reasonable jury could

conclude on the basis of these facts that if anyone exercised

the requisite control over the Flea Market's vendors (including

those who infringed Coach's trademarks), it was Sapatis.

                                 19
Accordingly, I deny summary judgment to Sapatis on Counts I and

II.

           b.    Contributory Trade Dress Infringement;
                 Contributory False Designation of Origin
                 And False Advertising; and Contributory
                 Trademark Dilution (Counts III-V)

      Although neither the Supreme Court nor the First Circuit

have discussed contributory trade dress infringement, "several

influential courts have recognized [it] as a cause of action."

See Coach, Inc. v. Farmers Mkt. & Auction, 

 (D. Md. 2012) (citing Coach, Inc. v. We Care Trading Co.,

Inc., 

 (2d Cir. 2002) (upholding jury

verdict for contributory trade dress infringement); Bauer Lamp

Co., Inc. v. Shaffer, 

 (11th Cir. 1991)     ("A

person who knowingly participates in furthering . . . trade

dress infringement is liable as a contributing party.");

R.F.M.A.S., Inc. v. Mimi So, 

 (S.D.N.Y.

2009) ("[T]hose who knowingly play a significant role in

furthering trade dress infringement are liable as contributing

parties.") ) .

      The same is true for contributory false designation of

origin and false advertising.     See 

 at 704-05 (citing Societe

Des Hotels Meridien v. LaSalle Hotel Operating P'ship, L.P., 38 0

F.3d 126, 133 (2d Cir. 2004); Fare Deals Ltd. v. World Choice
                                20
Travel.com, Inc., 

 (D. Md. 2001);

Grant Airmass Corp. v. Gaymar Indus., Inc., 

 (S.D.N.Y. 1986)) ("[T]o state a claim for contributory

false designation of origin and false advertising. Coach must

[show] . . . that (1) despite knowing that the Vendor Defendants

were using in commerce the plaintiff's mark in a manner likely

to confuse consumers about the source or sponsorship of the

goods or services, (2) the Market Defendants continued to supply

a means of infringement (3) over which they had means of control

or monitoring and which they have actively supported through

various promotional efforts." (internal quotation marks

omitted)); see also ADT Sec. Servs., Inc. v. Sec. One Int'l,

Inc., No. 11-CV-05149-YGR, 

, at *3 (N.D. Cal.

Sept. 14, 2012) ("In light of other courts' reasoned extension

of a claim for contributory false advertising . . . under the

Lanham Act, the Court similarly finds such an extension to be

appropriate.").

     Lastly, although the Supreme Court and First Circuit have

not addressed a contributory trademark dilution claim, this

court has recognized such a cause of action once before.     See

Coach, Inc. v. Gata Corp., No. 10-CV-141-LM, 

, *5

(D.N.H. Apr. 26, 2011) (holding that a cause of action for

                               21
contributory trademark dilution "does, in fact, exist," but

declining to analyze it at the motion to dismiss stage) .

Another district court has explained that the claim requires a

showing that the defendant "either encouraged others to dilute

or, as in Inwood Laboratories, continued to supply their product

[or service] to one whom it knows or has reason to know is

engaging in trademark infringement . . . ."    Farmers Mkt. &

Auction, 

 (internal quotation marks

omitted); see also Lockheed Martin, 

 (citing

Kegan v. Apple Computer Inc., 

, 1062 (N.D.

111. 1996)) ("The one court to recognize the contributory

dilution cause of action defined the claim as encouraging others

to dilute. . . .   The proposed cause of action thus appears to

import the definition of ^contributory' from Inwood . . . . " ) ;

Tiffany (NJ) Inc. v. eBay, Inc., 

(S.D.N.Y. 2008) (assuming without deciding that a contributory

trademark dilution cause of action exists and analyzing it under

the Inwood framework), aff'd in part, rev'd on other grounds in

part, 

 (2d Cir. 2010).

     Because the parties proceed as if all three causes of

action exist in this circuit, and that they each essentially

incorporate Inwood's "supplies its [service] to one whom it

                                 22
knows or has reason to know is engaging in [unlawful conduct]"

standard, I assume without deciding that the parties are correct

in their beliefs.     Sapatis moves for summary judgment with

respect to each count on the sole ground that he exercised

insufficient control over the Market and its vendors to satisfy

the Inwood standard.    Consequently, I deny his motion on Counts

III, IV, and V for the reasons discussed above.

          c.   Contributory Copyright Infringement (Count VI)

     The First Circuit has never directly addressed contributory

copyright infringement, and the two Supreme Court cases

discussing the doctrine have primarily dealt with aspects not at

issue in this case.     See Metro-Goldwyn-Mayer Studios Inc. v.

Grokster, Ltd., 

 (2005) (citing Gershwin Publ'g

Corp. v. Columbia Artists Mgmt., Inc., 

 (2d

Cir. 1971)) (noting that "[o]ne infringes [a copyright]

contributorily by intentionally inducing or encouraging direct

infringement," but addressing only intentional inducement); Sony

Corp. of Am. v. Universal City Studios, Inc., 

(1984) (establishing a safe harbor precluding contributory

copyright liability for the provision of products with

"commercially significant noninfringing uses").     One analogous

case concerning contributory copyright infringement in the

                                  23
context of a flea market has reached the courts of appeal,

however.   See Fonovisa, 

.   The Ninth Circuit in

Fonovisa applied a "material contribution to the infringing

activity" standard to hold that the plaintiff had stated a claim

against a flea market owner for contributory copyright

infringement, relying on essentially the same facts as it did in

the contributory trademark infringement context.     See 

; cf. Sony, 

 (Blackmun, J., dissenting)

("[0]ne who, with knowledge of the infringing activity, induces,

causes or materially contributes to the infringing conduct of

another, may be held liable as a ^contributory' [copyright]

infringer." (quoting Gershwin, 

)).     While noting

that "[t]he doctrine of contributory copyright infringement . .

. is not well-defined," Justice Blackmun concluded in Sony that

liability "may be imposed even when the defendant has no formal

control over the infringer."   

 (Blackmun, J.,

dissenting).

     Regardless of the precise terminology employed, it is

sufficient for the purposes of this case to note that

"[contributory] trademark infringement liability is more

narrowly circumscribed than [contributory] copyright

infringement . . . ."   See Fonovisa, 

 (citing Hard

                                24
Rock, 955 F.2d at 1149); accord Visa, 

; Contessa

Food Prods. Inc. v. Lockpur Fish Processing Co., 12 

, 751 n.3 (9th Cir. 2005); see also Sony, 

n.19 (contrasting the broader standard for contributory

copyright infringement with Inwood's "narrow standard for

contributory trademark infringement").   If a reasonable jury

could find that Sapatis's actions satisfied the Inwood

contributory trademark infringement standard, it could similarly

find that they satisfied the less stringent "material

contribution" standard for contributory copyright infringement.

Accordingly, I deny Sapatis summary judgment on Count VI for the

reasons discussed above.

     2.   State Law Claims (Counts VII and VIII)

          a.   Common Law Contributory Trademark Infringement
               (Count VII)

     Sapatis notes, correctly, that the New Hampshire Supreme

Court has never recognized a cause of action for contributory

trademark infringement.6   If that court were to do so, according


6
  Sapatis also notes that a literal reading of Coach's amended
complaint indicates that it states a claim for direct trademark
infringement under New Hampshire common law without alleging
contributory liability. See Doc. No. 26 ("Defendants . . . have
used and are continuing to use spurious designations that are
identical to . . . the Coach Trademarks. . . . in violation of
the common law."). He contends that the claim fails due to lack
of evidence demonstrating that he, rather than the vendors,
                                25
to Sapatis, it would likely analyze the claim under the federal

Inwood standard.     Sapatis contends that his activities at the

Flea Market during the relevant time period fail to meet that

standard, warranting summary judgment in his favor.

     Although the case law is scant, the New Hampshire Supreme

Court appears to rely primarily on federal law when state

trademark claims arise.     See, e.g., Nordic Inn Condo. Owners,

A s s ^ v. Ventullo, 

 (2004) (adopting the

federal law doctrine of estoppel by laches for state common law

trademark claims).     If it were presented with the issue, I see

no reason why the New Hampshire Supreme Court would not

recognize the common law tort of contributory trademark

infringement in line with the Inwood standard.     Accordingly, I

assume without deciding that a cause of action for contributory

trademark infringement exists under state law and deny Sapatis's

motion for summary judgment on Count VII for the reasons

discussed above.


directly infringed Coach's trademarks. Coach's objection to
Sapatis's motion for summary judgment makes clear that it
intended to assert a common law contributory trademark
infringement claim. See Doc. No. 33-1. Because both sides have
made their arguments regarding common law contributory
liability, I decline Sapatis's invitation to conduct the
meaningless exercise of granting him summary judgment on this
Count, then granting Coach leave to amend its complaint to more
clearly assert the appropriate claim.
                                26
          b.   Common Law Unfair Competition (Count VIII)

     "[T]he New Hampshire Supreme Court has not defined the

exact contours of common-law unfair competition . . . ."

Mueller Co. v. U.S. Pipe & Foundry Co., No. 03-170-JD, 

, at *5 (D.N.H. Oct. 2, 2003) (quoting Optical Alignment

Sys. & Inspection Servs., Inc. v. Alignment Servs. of N. Am.,

Inc., 

 (D.N.H. 1995)).     Coach directs me to a

decision of this court which concludes that New Hampshire would

recognize such a claim under the framework described in the

Restatement.   See Pacamor Bearings, Inc. v. Minebea Co., 

 (D.N.H. 1996) ("[0]ne who, in connection with the

marketing of goods or services, makes a representation relating

to the actor's own goods, services, or commercial activities

that is likely to deceive or mislead prospective purchasers to

the likely commercial detriment of another . . .    is subject to

liability to the other . . . ." (quoting Restatement (Third)

Unfair Competition § 2 (1995))).     Accepting Pacamor Bearings's

conclusion for the purposes of analysis. Coach must identify a

genuine issue of material fact with respect to the following

elements: "(a) [Sapatis's] representation is material, in that

it is likely to affect the conduct of prospective purchasers;

and (b) there is a reasonable basis for believing that the

                                27
representation has caused or is likely to cause a diversion of

trade from [Coach] or harm to [its] reputation or good will."

See id. (quoting Restatement (Third) Unfair Competition § 3 ) .

      "Assuming without deciding . . . that New Hampshire would

recognize a viable unfair competition [claim] in a case where

someone ^engages in conduct which deceives the general buying

public,'" see Wilcox Indus. Corp. v. Hansen, 

 (D.N.H. 2012) (quoting Optical Alignment, 

), Coach has failed to identify any material

representation made by Sapatis that likely deceived or misled a

potential customer.   Coach points in general terms to Sapatis's

"interface with vendors and customers on behalf of the Flea

Market, his marketing of its commercial activities, and his

supervision [of] the vendors who sold the Infringing Products .

. . ."   Doc. No. 33-1.   It is certainly likely that these

activities gave customers (as well as vendors and

representatives of Coach) the false impression that Sapatis

continued to own the Flea Market beyond 2008.   But at least for

purposes of an unfair competition claim, his representations (if

the aforementioned activities can be called that) were not

material because no evidence indicates that they "affect[ed] the

conduct of prospective purchasers" or were "likely to cause a

                                 28
diversion of trade from [Coach] or harm to [its] reputation or

good will."     See Pacamor Bearings, 

.    In all

likelihood, customers would have behaved exactly the same way,

and Coach would have suffered exactly the same harm, even if

customers had no doubt that Paul and TABA were the Flea Market's

proprietors.

     The only specific representation that Coach directs me to

is Sapatis's June 26, 2012 email message to a potential customer

"invit[ing him or her] to visit the Flea Market in response to

requests for ^fake' products for sale."     Doc. No. 33-1 (citing

Doc. No. 36-9).     That customer inquired whether "you have any

tables that sell fake ray bans . . . ," to which Sapatis

replied, "There are hundreds of sellers who are here to sell

many different items!     You will most likely find something you

want to have!     As for the fake ray bans? . . .   I think there is

[sic] none."    Doc. No. 36-9.   Regardless of whether this message

contains some hidden meaning that misled the customer about the

authenticity of certain sunglasses for sale at the Flea Market,

one thing is clear - it says absolutely nothing about Coach's

products, authentic or not.

     It may be true, as Coach claims, that "[t]he sale of

counterfeit products gives rise to the inference of consumer

                                  29
confusion," see Doc. No. 33-1, but that would only support an

unfair competition claim against the infringing vendors.         As for

Sapatis, nothing in the record indicates that he ever made a

representation that "[d]eceived consumers and the public into

believing that Infringing Products are genuine or authorized by

Coach."     See 

     I therefore grant summary judgment to Sapatis

on Count VIII.

B.      Claims Against Londonderry Marketplace

        Coach seeks to hold Londonderry Marketplace liable for all

the same claims it asserts against Sapatis.        Londonderry

Marketplace argues that it had nothing to do with the Flea

Market after November 2008, and it thus cannot be held liable

for any allegedly unlawful activity occurring there in 2011 and

2012.     In a sworn affidavit, Sapatis states:

     During   the 2008   flea market     season,  Londonderry
     Marketplace, LLC ran the food concession at the Flea
     Market, but TABA Enterprises ran the flea market
     portion of the business.     After the end of the 2008
     flea market    season,   and   into   2009,  Londonderry
     Marketplace, LLC wound down its operations. It ceased
     to do business altogether in 2009.      I stopped filing
     annual reports with the Secretary of State for
     Londonderry Marketplace, LLC in 2011 as I had no
     intention of reviving the business, and the company
     has now been administratively dissolved.

Doc. No. 30-2.        Coach counters that Sapatis "has continued to

act in a manner consistent with his earlier actions on behalf of

                                     30
[Londonderry Marketplace] without differentiating between his

individual actions and those taken on behalf of the company,"

and that Sapatis "draws no meaningful distinction between his

individual activities and those undertaken as a representative

of his company."     Doc. No. 33-1.   But Coach presents no evidence

to support this claim.

     There is no mention of Londonderry Marketplace in the

record after 2008, save for Sapatis's brief discussion of its

winding down and administrative dissolution.       Coach points to no

specific evidence showing that Sapatis purported to act on

behalf of Londonderry Marketplace in his dealings with the Flea

Market at any point after 2008.       Indeed, Coach concedes that

"Sapatis's unambiguous representations in his affidavit . . .

strongly suggest that [his] infringing activities, at least

since some point in 2009, were entirely undertaken on his own,

individual behalf and not as a representative of [Londonderry

Marketplace] ."    Doc. No. 33-1 (citing Doc. No. 30-2) .   Because

Coach has presented no evidence linking the company to the

alleged unlawful activity occurring at the Flea Market, I grant

summary judgment to Londonderry Marketplace on all counts.7


  Coach notes that Londonderry Marketplace is "apparently urging
that the company's inactivity justifies, in whole or in part,
the entry of summary judgment in its favor." Doc. No. 33-1.
                                31
                          IV.   CONCLUSION

      For the foregoing reasons I grant the motion for summary

judgment as it relates to Londonderry Marketplace in full, grant

the motion as it relates to Sapatis on Count VIII, and deny it

as it relates to Sapatis on all other counts. (Doc. No. 30).

      SO ORDERED.


                                /s/Paul Barbadoro
                                Paul Barbadoro
                                United States District Judge


January 31, 2014

cc:   Erica Mecler Caron, Esq.
      Jeffrey K. Techentin, Esq,
      Kyle Zambarano, Esq.
      Lisa Snow Wade, Esq.
      Robert S. Carey, Esq.
      Jeremy T. Walker, Esq.
      Nicholas F. Casolaro, Esq.




Coach counters that Londonderry Marketplace "has been placed in
an administrative dissolution status, but has not yet been
dissolved." 

 In light of my ruling, I need not determine
Londonderry Marketplace's exact corporate status or consider how
a New Hampshire corporation's administrative dissolution, see

-A:14.21, might affect its liability
under the instant claims.
                                32