By Dani Kass
Law360 (October 17, 2019, 7:23 PM EDT) — Nike Inc. can’t amend a 2011 suit to
accuse transportation intermediary City Ocean of infringing an additional 10 trademarks with counterfeit shoes it helped import, a New Jersey federal magistrate judge has ruled.
The shoe giant missed the deadline to amend its suit by seven years and couldn’t provide a good excuse to justify the delay, Magistrate Judge James B. Clark III said Wednesday. He also shot down Nike’s request to reopen discovery to bolster its damages argument, as that closed at least five years ago.
“This litigation has been pending for over eight years,” Judge Clark said. “Discovery has long been concluded and summary judgment has been decided. Reopening discovery at this stage in the litigation would undoubtedly and unduly delay the resolution of this matter.”
Nike launched the suit in 2011 against Eastern Ports Customs Brokers Inc., claiming the importer used doctored documents to clear tens of thousands of counterfeit sneakers through U.S. Customs and Border Protection in 2009. Customs seized two Eastern Ports shipments of more than 20,000 counterfeit shoes worth over $600,000, according to the complaint.
Eastern Ports then sued City Ocean, and Nike amended its own suit to name City Ocean as well. City Ocean International Inc. is an ocean transportation intermediary and City Ocean Logistics Co. arranges for third-party transportation services for goods being exported from China, according to Judge Clark.
Eastern Ports eventually stopped participating, and the court entered default judgment against it in July 2018, ordering it to pay Nike $240,000 in damages.
In that same July 2018 order, U.S. District Judge Claire C. Cecchi handed Nike summary judgment wins on several claims against City Ocean. She found that City Ocean engaged in trademark counterfeiting, trademark infringement and unauthorized importation.
The 10 additional trademark registrations that Nike wants to accuse Ocean City of infringing tie back to that same 2009 shipment. Since the amendment request is long after the scheduling order allowed for such changes, the court considered whether Nike had “good cause” for the wait.
But Nike admits that the additional marks had been on the sample of the seized shoes that it was originally shown and didn’t provide a good reason for not naming those marks in the original complaint, so Judge Clark said there was no permissible reason for the delay.
Nike then wanted to reopen discovery to focus more on damages, saying its earlier discovery had been liability focused. Fact discovery closed in October 2013 and expert discovery closed in May 2014, the magistrate judge said.
The liability verses damages argument fails because the court never bifurcated discovery, nor
were there any restrictions on discovery, the opinion states.
“Thus, any failure by plaintiff to pursue expert discovery on the issues of damages was either intentional on plaintiff’s part or resulted from a lack of diligence and weighs against granting plaintiff’s present request,” Judge Clark said.
Richard A. Catalina Jr. of Jardim Meisner & Susser PC, who represents City Ocean, said they’re “pleased with the ruling and believe the court correctly decided the motion.”
Counsel for Nike didn’t immediately respond to requests for comment Thursday.
Nike is represented by Michael D. Hynes and Stephen C. Matthews of DLA Piper, and Michael W.O. Holihan and Kimberly A. Harchuck of Holihan Law.
City Ocean is represented by Richard A. Catalina Jr. of Jardim Meisner & Susser PC.
The case is Nike Inc. v. Eastern Ports Custom Brokers Inc. et al., case number 2:11-cv-04390, in the U.S. District Court for the District of New Jersey.
–Editing by Jack Karp.