08-3181 | Omnilex

Texto completo

08-3181-CV
JA Apparel Corp.
v. Abboud

UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

August Term, 2008

(Argued: October 22, 2008

Decided: June 10, 2009)

Docket No. 08-3181-Cv

Plaintiff - Counterclaim-
Defendant-Appellee,

\- V. -

JOSEPH ABBOUD, HOUNDSTOOTH CORP., HERRINGBONE
CREATIVE SERVICES, INC.,

Defendants-Counterclaimants-
Appellants,

\- v. -

Counterclaim-Defendant -
Appellee.

Before: KEARSE, SACK, and KATZMANN, Circuit Judges.

Appeal from a judgment of the United States District Court
for the Southern District of New York, Theodore H. Katz,
Magistrate Judge, permanently enjoining defendants from using the
name "Joseph Abboud" commercially.

Vacated and remanded for further proceedings.

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Judge Sack concurs, in a separate opinion.

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JA APPAREL CORP.,
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MARTIN STAFF,
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THOMAS A. SMART, New York, New York
(Phillip A. Geraci, Richard A. De
Sevo, Michael Denvir (pending
admission) , Kaye Scholer, New York,
New York, on the brief) , for
Plaintiff-Counterclaim-Defendant-
Appellee and Counterclaim-Defendant-
Appellee.

RANDY LIPSITZ, Kramer Levin Naftalis &
Frankel, New York, New York (Louis
Ederer, Arnold & Porter, New York, New
York, on the brief) for Defendants-
Counterclaimants-Appellants.

KEARSE, Circuit Judge:

Defendants Joseph Abboud ( "Abboud") et al. appeal from so
much of a final judgment entered in the United States District
Court for the Southern District of New York following a bench
trial before Theodore H. Katz, Magistrate Judge, as permanently
enjoined them from using, inter alia, the name "Joseph Abboud" to
sell, market, or promote, goods, products, or services to the
consuming public, and dismissed their counterclaims against
plaintiff JA Apparel Corp. ("JA Apparel" or "JA") and
counterclaim-defendant Martin Staff alleging improper use of
Joseph Abboud's name. The district court found that JA, Abboud,
and defendant Houndstooth Corp. ("Houndstooth") had entered into
an unambiguous contract pursuant to which Abboud and Houndstooth
sold to JA the exclusive rights to the commercial use of the name
"Joseph Abboud" and trademarks containing that name, and that
Abboud's proposed use of his name in connection with a new line of
clothing would breach the terms of that sale agreement and
infringe trademarks sold to JA. On appeal, defendants contend

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principally that the district court misinterpreted the sale
agreement, erred in rejecting their defense of fair use, and
fashioned an overly broad injunction. For the reasons that
follow, we conclude that the district court erred in finding that
the sale agreement is unambiguous and in declining therefore to
consider extrinsic evidence as to the contracting parties' intent.
We also conclude that the judgment cannot be upheld on the basis
of the court's rulings on the trademark issues. We thus vacate
the judgment and remand for further proceedings on the contract
issue and, if necessary, on the trademark issues.

# I. BACKGROUND

The following facts are taken from the district court's
findings after trial, see JA Apparel Corp. v. Abboud, No. 07 Civ.
7787, 2008 WL 2329533 (S.D.N.Y. June 5, 2008) ("JA Apparel"), and,
unless otherwise indicated, are not disputed.

## A. The Parties

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Abboud is a world-famous fashion designer and
philanthropist whose work in both capacities has garnered numerous
honors and awards. Defendants Houndstooth and Herringbone
Creative Services, Inc. ("Herringbone"), are companies wholly
owned by Abboud. Since 1987, Abboud's personal name "Joseph
Abboud" has been registered as a trademark with the United States
Patent and Trademark Office.

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JA is a corporation engaged in the manufacture,
marketing, and sale of products using "Joseph Abboud" trademarks;
Martin Staff is JA's chief executive officer. JA was formed in
1988 as a joint venture between Houndstooth and GFT International
B.V. ("GFT") and operated under a license from Abboud. In 1996,
GFT purchased Houndstooth's interest in JA, thereby becoming JA's
sole owner. The 1988 license was canceled and Abboud issued new
licenses to JA.

## B. The Sale Agreement

In 2000, Abboud, Houndstooth, and JA entered into an
Agreement of Purchase and Sale dated June 16, 2000, and executed
on July 13, 2000 ( "Sale Agreement" or "Agreement"), for the sale
of certain assets to JA. The Sale Agreement provided in pertinent
part that Abboud and Houndstooth would, in exchange for the
payment to Abboud of $65.5 million, transfer to JA all of their
right, title and interest in and to:

(A) The names, trademarks, trade names,
service marks, logos, insignias, and
designations identified on Schedule 1.1 (a) (A),
and all trademark registrations and applications
therefor, and the goodwill related thereto
(collectively the "Trademarks"), together with
all causes of action (and the proceeds thereof)
in favor of [Abboud and Houndstooth] heretofore
accrued or hereafter accruing with respect to
any of the Trademarks, and all other
Intellectual Property (as hereinafter defined) .

(B) All licenses to use the Trademarks
granted by Houndstooth or Abboud
(collectively, the "License Agreements" ) .

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service marks, logos, insignias and designations
containing the words "Joseph Abboud, " "designed
by Joseph Abboud, " "by Joseph Abboud, " "JOE" or
"JA, " or anything similar thereto or derivative
thereof, either alone or in conjunction with
other words or symbols (collectively, the "New
Trademarks"), for any and all products or
services.

(D) All books, financial records,
invoices, and other documents, records and data
files relating primarily to the Trademarks or
the License Agreements.

(E) The goodwill of or pertaining to the
Trademarks. (The items referred to in clauses
(A) through (E) of this Section 1.1 (a) are
collectively referred to as the "Assets") .

(Sale Agreement | 1.1 (a) (emphasis in original) .) The Agreement
defined "Intellectual Property, " referred to in | 1.1 (a) (A), as
"all of the trademark registrations, service mark registrations
and applications and copyright registrations and applications
currently used by [Abboud and Houndstooth] in connection with the
Trademarks" listed in "Schedule 1.1 (a) (A)." (Id. [ 3.6 (a)
(emphasis in original) .)

Schedule 1.1 (a) (A), referred to in || 1.1 (a) (A) and
3.6 (a), bore the title "Joseph Abboud/J.A. Apparel, " with a
subheading "Trademark Report by Mark." It listed pending and
completed trademark and service mark registrations in various
countries, grouped largely by type of design, with headings such
as "Diamond and Rectangle Design, " "Miscellaneous Diamond Design, "
"Joseph Abboud, " "Joseph Abboud & Design, " and "Joseph Abboud and
Miscellaneous Diamond Design. "

In conjunction with their execution of the Sale Agreement
on July 13, 2000, Abboud and JA also executed a Personal Services

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Agreement that was to span a total of seven years. In the
Personal Services Agreement, Abboud agreed that for the first five
years he would provide personal services to JA (the "personal
services period") by, inter alia, becoming "Chairman Emeritus" and
supplying ideas for the design and marketing of "Joseph Abboud"
products. For two additional years, Abboud agreed not to compete
with JA (the "non-compete period") .

## C. The Present Action

During the non-compete period of the Personal Services
Agreement, which ended on July 13, 2007, Abboud undertook, in part
through Herringbone, preparations for the design and launch of a
new collection of high-end men's clothing for sale under the label
"jaz" in the fall of 2008. Abboud's plans became public in two
articles published on August 6, 2007, one in the Wall Street
Journal -- Ray A. Smith, What's in a Name? Not Much, He Hopes, Wall
Street Journal, Aug. 6, 2007, at B1 -- and the other in DNR, the
leading magazine of the men's fashion industry. The DNR article
initially stated that "Abboud, the person, is prohibited from
using the Joseph Abboud name on any product or marketing
materials." David Lipke, All That Jaz: Abboud Unveils His New

Label, DNR, Aug. 6, 2007, at 12. At Abboud's request, however,

DNR issued a "Clarification" that stated, "according to Abboud and
his attorney, . . . the designer . . . is, in fact, allowed to use
his name on marketing and advertising materials for Jaz." DNR,

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Aug. 13, 2007, at 5.

JA commenced the present action on September 4, 2007. Its
complaint alleged principally that Abboud's proposed use of his
personal name to sell the "jaz" brand breached the Sale Agreement
and constituted trademark infringement in violation of § 32 (1) of
the Lanham Act, 15 U. S. C. § 1114 (1), and New York common law.
The complaint also contained claims of, inter alia, false
designation of origin and trademark dilution in violation of
§§ 43 (a) and (c) of the Lanham Act, 15 U.S.C. §§ 1125 (a) and (c) ,
and New York General Business Law ("N. Y. Gen. Bus. Law") § 360-1,
and false and deceptive trade practices in violation of N.Y. Gen.
Bus. Law §§ 349-50. JA requested damages and permanent injunctive
relief, and it moved for a preliminary injunction.

Abboud, Houndstooth, and Herringbone denied wrongdoing and
asserted defenses of, inter alia, trademark fair use and unclean
hands. They also asserted counterclaims alleging that JA and
Staff had improperly used Abboud's name in connection with
"Joseph Abboud" products following the expiration of the Personal
Services Agreement's personal services period. The counterclaims
alleged that JA and Staff had thereby engaged in, inter alia,
false endorsement, false advertising, and unfair competition, and
had violated New York civil rights laws. The counterclaims
requested injunctive relief and damages.

The parties consented to have the proceedings conducted
before a magistrate judge. They also agreed to have the
magistrate judge conduct a hearing on JA's preliminary injunction
motion consolidated with trial on the merits.

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Prior to the trial, JA moved in limine to exclude parol
evidence as to the meaning of the Sale Agreement. However, as the
parties' submissions on that motion were not completed before the
eve of trial, the magistrate judge reserved judgment on the
motion, stating that he would allow the parties to present parol
evidence but that he would not consider that evidence if he found
the Sale Agreement to be unambiguous.

At trial, therefore, the parties presented "fairly
extensive extrinsic evidence" as to the meaning of the Sale
Agreement, JA Apparel, 2008 WL 2329533, at *8, including
correspondence, meeting minutes, testimony by the negotiating
attorneys, and other documentation of the drafting process. In
addition, on the trademark issue, the court received, inter alia,
testimony from Abboud about his proposed use of his name and
"mock-ups" of proposed "jaz" advertisements displaying his name in
various ways. (See Part II.B. below. )

In an opinion issued on June 5, 2008, the court found the
Sale Agreement to be unambiguous, and it thus declined to consider
the parties' parol evidence. As discussed in Part II.A. below,
the court found that the Sale Agreement unambiguously conveyed to
JA "all of Abboud's rights to use his name for commercial
purposes, " JA Apparel, 2008 WL 2329533, at *9. The court found
that Abboud's planned use of his name to market "jaz" would thus
constitute a breach of contract. Id. at *16.

Although finding that its decision on the contract claim
made it largely unnecessary to rule on JA's trademark infringement

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stated that JA had

claims, see id., the court addressed the Lanham Act infringement
claim in the interest of completeness and concluded that "Abboud's
proposed use of his name in connection with the 'jaz' line would
also constitute trademark infringement
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Id. The court

already established that it purchased the exclusive
right to the Joseph Abboud name for commercial
purposes, and, therefore, any proposed use by Abboud
of his name commercially is improper. Moreover, in
this specific case, it is difficult to analyze the
trademark claims in isolation from the Agreement
because Abboud not only sold the rights to his name,
he also sold the rights to use and apply for the
registration of, among other things, new trademarks
or designations containing the words "Joseph Abboud, "
"by Joseph Abboud, " "designed by Joseph Abboud, " and
"JOE, " or anything similar to or derivative of those
phrases. Thus, what may have constituted a
permissible use of Abboud's name under the Lanham Act
is largely foreclosed by the express terms of the
Agreement .

Id. The court further explained that Abboud had not met his
burden of establishing a trademark defense of fair use, stating,
inter alia, that

Abboud is attempting to use his name, and the
goodwill associated with it, to identify and
distinguish goods, and to advise consumers that he is
the source of his new "jaz" line. Therefore,
although there is a descriptive component to Abboud's
proposed uses, the Court concludes that he is also
attempting to use his name, at least in part, as a
trademark and that the confusion generated by his
proposed uses would be far more than incidental. It
is patently obvious that consumers seeing JA
Apparel's products, marked or advertised as "Joseph
Abboud" or "by Joseph Abboud, " would be utterly
confused as to whether the "jaz" products advertised
as "by designer Joseph Abboud, " were derived from the
same source.

Id. at *20.

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On appeal, defendants contend principally that the
district court misinterpreted the Sale Agreement as evincing
Abboud's intent to convey to JA all of his rights to use his name
for commercial purposes. They argue that the transactional
documents and the surrounding circumstances made it clear that
Abboud did not intend to sell his name other than as a brand name,
service mark, or trademark. They also contend that the district
court erred in rejecting their trademark defense of fair use, in
issuing an injunction that is unduly broad, and in rejecting their
unclean-hands defense and counterclaims premised on JA's alleged
misuse of Joseph Abboud's name and persona. For the reasons that
follow, we conclude (a) that the district court erred in ruling

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In addition, the court rejected defendants' unclean-hands
defense and counterclaims, which asserted that JA had used
Abboud's name unfairly, after the end of the personal services
period, to indicate his personal endorsement of JA products. The
court concluded that JA had not acted in bad faith by creatively
using the Joseph Abboud name and trademarks it had purchased to
promote its brand. See id. at *34 & n.41.

The court entered judgment accordingly and permanently
enjoined Abboud from "using his personal name to sell, market, or
otherwise promote, goods, products, and services to the consuming
public." Judgment, decretal | 3.

## II. DISCUSSION

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that the Sale Agreement unambiguously conveyed all of Abboud's
rights to use his name commercially, and (b) that that error
affected several of its other rulings, and we therefore remand for
further proceedings.

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A. The Contract Claim

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Under New York law, which the parties agree governs their
contract dispute, the question of whether a written contract is
ambiguous is a question of law for the court. See, e.g., Seiden
Associates, Inc. v. ANC Holdings, Inc., 959 F.2d 425, 429 (2d Cir.
1992) ("Seiden") . "Ambiguity is determined by looking within the
four corners of the document, not to outside sources
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Kass v. Kass, 91 N.Y.2d 554, 566, 673 N.Y.S.2d 350, 356 (1998).

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Contract language is not ambiguous if it has "a definite and
precise meaning, unattended by danger of misconception in the
purport of the [contract] itself, and concerning which there is no
reasonable basis for a difference of opinion." Breed v. Insurance
Company of North America, 46 N. Y.2d 351, 355, 413 N.Y.S.2d 352,
355 (1978) ; see, e.g., Seiden, 959 F.2d at 428. "Language whose
meaning is otherwise plain does not become ambiguous merely
because the parties urge different interpretations in the
litigation." Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d
1274, 1277 (2d Cir. 1989). Rather, " [a]mbiguous language is
language that is 'capable of more than one meaning when viewed
objectively by a reasonably intelligent person who has examined

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the context of the entire integrated agreement and who is

cognizant of the customs, practices, usages and terminology as
generally understood in the particular trade or business. '"
Revson v. Cinque & Cinque, P.C., 221 F. 3d 59, 66 (2d Cir. 2000)
("Revson") (quoting Seiden, 959 F.2d at 428 (other internal
quotation marks omitted) ) ; see, e.g., Readco, Inc. v. Marine
Midland Bank, 81 F.3d 295, 299 (2d Cir. 1996) ("contract is
ambiguous where reasonable minds could differ on what a term
means") . We review de novo the district court's decision as to
whether a contract is ambiguous. See, e.g., Revson, 221 F.3d at
66; Tourangeau v. Uniroyal, Inc., 101 F.3d 300, 306 (2d Cir.
1996) ; Seiden, 959 F.2d at 429.

If the contract is unambiguous, its meaning is likewise a
question of law for the court to decide. See, e.q., Revson, 221
F.3d at 66; K. Bell & Associates v. Lloyd's Underwriters, 97
F.3d 632, 637 (2d Cir. 1996). In interpreting an unambiguous
contract, the court is to consider its " [p]articular words" not in
isolation "but in the light of the obligation as a whole and the
intention of the parties as manifested thereby, " Kass v. Kass, 91
N. Y. 2d at 566, 673 N. Y.S.2d at 356-57, but the court is not to
consider any extrinsic evidence as to the parties' intentions,
see, e.q., Seiden, 959 F.2d at 428; Metropolitan Life Insurance
Co. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir. 1990) .

However, where the contract language creates ambiguity,
extrinsic evidence as to the parties' intent may properly be
considered. See, e.g., Seiden, 959 F.2d at 426, 429; In re
Consolidated Mutual Insurance Co., 77 N.Y.2d 144, 150, 565

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N. Y. S. 2d 434, 436 (1990) ; 67 Wall Street Co. v. Franklin National
Bank, 37 N.Y.2d 245, 248, 371 N.Y.S.2d 915, 918 (1975). Where
there is such extrinsic evidence, the meaning of the ambiguous
contract is a question of fact for the factfinder. Revson, 221
F.3d at 66; Consarc Corp. v. Marine Midland Bank, N.A., 996 F.2d
568, 574 (2d Cir. 1993) ; Rothenberg v. Lincoln Farm Camp, Inc.,
755 F.2d 1017, 1019 (2d Cir. 1985) .

In the present case, addressing the threshold question of
ambiguity, we conclude that the scope of the right to use Abboud's
name conveyed by the Sale Agreement is ambiguous. In | 1.1 (a) (A)
of the Agreement, set out in full in Part I.B. above, Abboud and
Houndstooth transferred to JA all their right, title, and interest
to

[t]he names, trademarks, trade names, service marks,
logos, insignias and designations identified on
Schedule 1.1 (a) (A), and all trademark registrations
and applications therefor, and the goodwill related
thereto (collectively the "Trademarks") .

(Sale Agreement | 1.1 (a) (A) (emphasis in original) .)

JA
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contended, and the district court agreed, that this language
unambiguously conveyed to JA all right to use Joseph Abboud's
name commercially. The court reached this conclusion based on the
use of the phrase " [t]he names" :
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Abboud agreed to sell all rights to, among other
things, the "names" on Schedule 1.1 (a) (A), and the
name Joseph Abboud appears repeatedly on that
schedule. Alternatively stated, if Abboud only
intended to convey trademarks, then the Agreement
could have and should have said: "Abboud agrees to
sell . . . all of [his] right, title and interest in
and to the trademarks identified on Schedule
1.1 (a) (A) . " But it said more than that, and in order
to give the word "names" due meaning and effect, the

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Court must interpret the Agreement in a manner that
provides JA Apparel with that which it expressly
purchased -- all of Abboud's rights to use his name for
commercial purposes.

JA Apparel, 2008 WL 2329533, at *9 (emphases added) .

We cannot agree that the Sale Agreement unambiguously so
provided. Preliminarily, we note that although that court stated
that JA "expressly" purchased "all of Abboud's rights to use his
name for commercial purposes, " id., there is in fact no such
language in the Agreement. The court may have been influenced by
its apparent acceptance of JA's contention that

it would defy common sense to accept the premise
that JA Apparel paid $65.5 million to acquire the
. . . right to use "Joseph Abboud" or "by Joseph
Abboud" as a trademark, while agreeing to let Abboud
use the exact same words with respect to a competing
clothing line, but in a non-trademark sense,

JA Apparel, 2008 WL 2329533, at *22. However, the fact that JA
paid a large price for the Joseph Abboud brand (and existing
licensing agreements) does not necessarily mean that JA purchased
the right to prohibit Abboud from using his name to refer to
himself in a non-trademark sense. There is no provision in the
Sale Agreement conveying "all of Abboud's rights to use his name
for commercial purposes, " JA Apparel, 2008 WL 2329533, at *9, and
the district court was not entitled to supply such a provision in
the name of common sense, much less to call it "express [] , " id.

Nonetheless, the court's interpretation of the Agreement
as conveying to JA all commercial right to use Joseph Abboud's
name is a plausible reading of the word "names" in | 1.1 (a) (A) ,

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given that that word is unadorned and that the name "Joseph
Abboud" is used many times in Schedule 1.1 (a) (A) .

Defendants contend, however, that the word "names" in
1 1.1 (a) (A) was intended to mean only brand names, and their
interpretation is reasonable in light of several aspects of the
Agreement. First, such an interpretation is reasonable given that
brand names are similar to the items immediately following the
word "names" in that paragraph, to wit "trade names, service
marks, logos[ and] insignias." And, indeed, | 1.1 (a) (A) itself
defined all of these terms -- along with the registrations,
applications, and associated goodwill -- as " (collectively the
'Trademarks')," a term that would seem to connote existing or
pending uses. If JA intended to acquire "all of Abboud's rights
to use his name for commercial purposes, " JA Apparel, 2008 WL
2329533, at *9 (emphasis added), the Agreement could have said,
instead of simply "names, " "the names 'Abboud' and 'Joseph
Abboud, '" and done so without the accompanying reference to the
schedule of existing and pending uses of the names.

Second, given that | 1.1 (a) (A) conveyed " [t]he names
identified on Schedule 1.1 (a) (A)" (emphasis in original), it is
reasonable to read that paragraph as conveying those names in the
context in which they were shown in that Schedule. That Schedule
listed foreign and domestic trademark and service mark
registrations that had been completed or were pending. (See,
e.g., Sale Agreement | 3.6 (a) (describing Schedule 1.1 (a) (A) as a
list of "registrations and applications currently used by [Abboud

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and Houndstooth] " ) .)
Registrations and applications "currently
used" plainly did not exhaust Abboud's right to use his name in
the future.

Finally, 1 1.1 (a) (A) is not the only paragraph in which
Abboud and Houndstooth conveyed rights. In subparagraph (C) of
[ 1.1 they also conveyed

[a]ll rights to use and apply for the registration of
new trade names, trademarks, service marks, logos,
insignias and designations containing the words
"Joseph Abboud, " "designed by Joseph Abboud, " "by
Joseph Abboud, " "JOE" or "JA, " or anything similar
thereto or derivative thereof, either alone or in
conjunction with other words or symbols
(collectively, the "New Trademarks"), for any and all
products or services.

(Sale Agreement | 1.1 (a) (C) .)
If, as the district court
concluded, the word "names" in | 1.1 (a) (A) conveyed "all of
Abboud's rights to use his name for commercial purposes, " JA
Apparel, 2008 WL 2329533, at *9 (emphasis added), there would have
been no need for the parties to add subparagraph (C) to give JA
the right to use and apply for new registrations of marks
"containing the words 'Joseph Abboud. '" Under the district
court's interpretation of the Agreement, subparagraph (C) is
redundant. Such redundancy itself makes the unadorned word
"names" in | 1.1 (a) (A) ambiguous.

JA contends that " [s]ection [sic] 1.1 (a) (C) clearly
conveyed the right to use 'Joseph Abboud' and 'designed by Joseph
Abboud' 'or anything similar thereto or derivative thereof, ' as
designations regardless of whether used as a trademark." (JA
brief on appeal at 30.)
This reading of | 1.1 (a) (C) would

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enhance, rather than eliminate, the redundancy of subparagraph (C)
if "names" in | 1.1 (a) (A) is interpreted as all rights to use
Abboud's name. Further, although JA is correct that the language
of subparagraph (C) clearly gave JA the right to use Abboud's name
in more than trademarks -- given that it conveyed " [a]ll rights to
use and apply for registration of new trade names, trademarks,
service marks, logos, insignias and designations containing the
words 'Joseph Abboud, ' 'designed by Joseph Abboud, '" etc. (Sale
Agreement | 1.1 (a) (C) ) -- it did not clearly grant the right to
"use" Abboud's name other than as it would be "contain [ed]" in
such new names, marks, and logos, etc.

If, as defendants contend, the word "names" in | 1.1 (a) (A)
means brand names or those uses of the names "identified on"
Schedule 1.1 (a) (A) as existing or pending uses, subparagraph (C)
is not redundant. Interpreted in this way, | 1.1 (a) (A) simply
conveyed to JA the right to all existing brands and marks and all
marks for which application had been made (referred to in | 3.6 (a)
as "current [] " "Trademarks" ) , while | 1.1 (a) (C) conveyed to JA the
right to use Joseph Abboud's name in applying for new marks
(indeed, defined in | 1.1 (a) (C) as " (collectively, the 'New
Trademarks') ") . Nothing in these conveyances of the rights to use
Abboud's name in the current marks or in new marks, however, used
any form of the word "exclusivity" or stated in words that Abboud
could not make non-trademark use of his name in connection with
his new creations following the end of the non-compete period.

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Given the above conflicting interpretations of the Sale
Agreement, we conclude that the intended meaning of the word
"names" in | 1.1 (a) (A), on which the district court's rulings
turned, is ambiguous. Given the ambiguity, the parties were
entitled to submit extrinsic evidence as to the intent with which
they entered into the Agreement, and the court should have
considered that evidence in determining whether JA had met its
burden of proving that Abboud breached the Agreement.

## B. The Lanham Act Trademark Claim

The district court also ruled against defendants on the
ground that Abboud's proposed use of his name in conjunction with
his new "jaz" line of clothing would constitute trademark
infringement in violation of the Lanham Act. We note that the
issues in the litigation had been limited, with the dispute
centering on Abboud's right to use his name in advertising. As
the district court described the parties' respective positions,
defendants "conceded that they [we]re not seeking to use the
Joseph Abboud name on clothes, labels, or hang-tags for the 'jaz'
line"; Abboud merely wanted "to be able to use his name in
advertising materials . . . to be able to identify himself in text
as the designer of the
jaz products that are at issue." JA
Apparel, 2008 WL 2329533, at *6 n.4 (internal quotation marks
omitted) . JA, for its part, conceded that it was "not seeking to
prevent Abboud from being in business and competing, or personally
presenting his new 'jaz' line to prospective purchasers, such as

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Bloomingdale's," but it sought to prohibit Abboud from using his
name in "advertising." Id. ("' [O]nce he starts advertising, then
he's trading on the same reputation that is, in fact, merged into
the goodwill of the brand that he sold to us. '" (quoting counsel
for JA) ) . Both sides introduced mock-ups of Abboud's proposed
advertisements.

In the district court, as here, defendants effectively
conceded that JA owned valid "Joseph Abboud" trademarks and that
it had made a prima facie showing under the Polaroid test,
Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d
Cir.), cert. denied, 368 U.S. 820 (1961); see, e.g., Streetwise
Maps, Inc. v. VanDam, Inc., 159 F.3d 739, 742 (2d Cir. 1998), that
the use of his name as a trademark would likely cause confusion,
see, e.g., Mattel, Inc. v. Azrak-Hamway International, Inc., 724
F.2d 357, 360-61 (2d Cir. 1983) ( "Mattel") ("confusion" means
whether "consumers [have been] misled into believing that the two
[products] came from the same source") . But defendants contended
that they were entitled, under the Lanham Act, to the defense of
fair use, which is not defeated by the existence of some

confusion, see KP Permanent Make-Up, Inc. v. Lasting Impression I,
Inc., 543 U.S. 111, 121-22 (2004). Such a defense is available to
a defendant who establishes, to the extent pertinent here,

[t]hat the use of the name, term, or device charged
to be an infringement is a use, otherwise than as a
mark, of the party's individual name in his own
business, or of the individual name of anyone in
privity with such party, or of a term or device which
is descriptive of and used fairly and in good faith
only to describe the goods or services of such party

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15 U.S.C. § 1115 (b) (4) .

Assessment of this defense thus requires analysis of
whether a given use was " (1) other than as a mark, (2) in a
descriptive sense, and (3) in good faith." EMI Cataloque
Partnership v. Hill, Holliday, Connors, Cosmopulos Inc., 228 F.3d
56, 64 (2d Cir. 2000) ("EMI"). In making these assessments, the
court focuses on the actual or proposed uses themselves. See,
e.g., id. at 66-68 (evaluating both a mock-up and the final
version of an allegedly infringing commercial) ; see also TCPIP
Holding Co. v. Haar Communications, Inc., 244 F.3d 88, 104 (2d
Cir. 2001) ; Venetianaire Corp. of America v. A & P Import Co., 429
F.2d 1079, 1082 (2d Cir. 1970). In addressing defendants'
fair-use defense, the district cited the above three elements of
the defense, see JA Apparel, 2008 WL 2329533, at *18, but its
analysis of the first and third elements, discussed below, gives
us pause.

With respect to the first element, we have equated "use
as a mark" with "the use of [a] term as a symbol to attract
public attention. " Safeway Stores, Inc. v. Safeway Properties,
Inc., 307 F.2d 495, 499 (2d Cir. 1962). Compare id. (term was
used as a mark where it was obviously employed "as a symbol to
attract public attention") , with Mattel, 724 F.2d at 361 (phrase
was used otherwise than as a mark where it "was located on the
package in a place and manner that only the close reader would
notice") . See also Restatement (Third) of Unfair Competition § 28
comment c (noting the relevance of the "physical nature of the use

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in terms of size, location, and other characteristics in
comparison with the appearance of other descriptive matter or
other trademarks, " as well as the "presence or absence of
precautionary measures such as labeling or other devices designed
to minimize the risk that the term will be understood in its
trademark sense") .

With respect to the third element of the fair-use defense,
the inquiry into the defendant's good faith "concerns the question
whether the user of a mark intended to create consumer confusion
as to source or sponsorship." EMI, 228 F.3d at 66-67; see also
id. at 66 (noting that in "analyzing the proper scope of fair use
good faith, precedents discussing good faith as the sixth Polaroid
factor . . . are relevant because the focus of the inquiry is the
same") ; Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v.
Steinway & Sons, 523 F.2d 1331, 1339 (2d Cir. 1975) (analysis of
the sixth Polaroid factor requires inquiry as to whether the
alleged infringer had a "deliberate intent to infringe") .

The district court in the present case indicated that
defendants may have established the second element of their fair-
use defense, as it noted that "such phrases as 'by the award-
winning designer Joseph Abboud'" have "a descriptive component. "
JA Apparel, 2008 WL 2329533, at *19. But it found that defendants
had not established the otherwise-than-as-a-mark and good-faith
elements. As to the latter, the court stated, inter alia, that
"in the context of the good faith analysis under the 'fair use'
doctrine, it must be noted that Abboud is attempting to use that

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which he expressly sold to [JA]." Id. As to the former, the

court stated that

Id. at *20.

With respect to the good faith issue, we conclude that the
district court applied a standard that was erroneous for at least
two reasons. First, giving effect, respectively, to the end and
the beginning of the above passage from *20, we note that the
district court found that consumers would be confused by Abboud's
proposed use of his name, but that Abboud was not attempting to
confuse. Rather than finding an attempt to confuse, the court
found that Abboud was "attempting" to "distinguish" his clothing
from that of JA and to "advise consumers that he is the source of
his new 'jaz' line" (emphases added) . Thus, the court's finding
of a lack of good faith could not be premised -- as required by our
fair-use precedents -- on an intent to confuse.

Second, the court's actual premise for finding that
Abboud's proposed use of his name was not in good faith was its
conclusion that the Sale Agreement unambiguously conveyed to JA

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all right to use Abboud's name commercially. See, e.g., JA
Apparel, 2008 WL 2329533, at *19 ("in the context of the good
faith analysis under the 'fair use' doctrine, it must be noted
that Abboud is attempting to use that which he expressly sold to
[JA] ") ; id. (finding it "very difficult, if not improper, to
completely ignore the Agreement in the context of Abboud's 'fair
use' defense") ; id. at *16 (" [as JA] established that it purchased
the exclusive right to the Joseph Abboud name for commercial

purposes,
any proposed use by Abboud of his name
commercially is improper" (emphases added) ) ; id. ("what may have
constituted a permissible use of Abboud's name under the Lanham
Act is largely foreclosed by the express terms of the Agreement ") .
As the district court's premise that the Sale Agreement was an
unambiguous all-commercial-use-encompassing conveyance was
erroneous (see Part II.A. above), its rejection of the fair-use
defense on the basis that there could be no good-faith use of what
the court viewed as having been sold was likewise erroneous.

In sum, given that the district court found that Abboud
was attempting to distinguish the "jaz" line from JA products --
which is inconsistent with an intent to confuse -- and that its
finding as to lack of good faith rested on its erroneous view of
the Sale Agreement, the court's finding that Abboud's proposed
advertising use of his name was not in good faith lacked any
proper foundation.

With respect to whether Abboud sought to "use" his name
"otherwise than as a mark, " 15 U.S.C. § 1115 (b) (4), our principal

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difficulty with the district court's conclusion is that the court
appears to have resolved this question without considering the
proposed uses themselves. Although there is a sentence in the
background section of the court's opinion in which the court, in
describing defendants' contentions, mentions the presentation of
advertisement mock-ups, see JA Apparel, 2008 WL 2329533, at *5,
the mock-ups are not mentioned again, and the court gives no
indication of having considered such matters as the size,
location, or context of the "Joseph Abboud" name in comparison
with the appearance of other descriptive matter in any given
proposed advertisement, or the likely effect of any given proposed
advertisement as a whole.

Our review of the record persuades us that individualized
consideration of the various proposed advertisements is needed.
For example, in some of the 8%-by-11-inch mock-ups, the "jaz" name
is displayed prominently in script some three inches high; in
others it is about one inch high. In the latter mock-ups,
beneath the "jaz" logo are the words -- all in type smaller than
"jaz" -- "A New Composition by JOSEPH ABBOUD" in solid capitals,
with the name "JOSEPH ABBOUD" in larger capitals than the rest.
(JA Exhibits 41-42.)

On the other hand, in several advertisements in which the
"jaz" logo is some three inches high, the tagline below "jaz" does
not mention Abboud but rather reads "An american Luxury
collection" in letters about 1% of an inch high. (JA Exhibit 43.)
In these mock-ups, a picture of Abboud appears on the far right

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side, and in the bottom corner, below the image of Abboud, is the
following text :

Designer Joseph Abboud in a 2 Button Super 120 S
Charcoal Chalkstripe from His Fall 2008 Jaz
Collection
Designer Joseph Abboud Is No Longer Associated or
Affiliated with JA Apparel Corp., the Owner of the
Trademark "Joseph Abboud"TM.

(Id.) This text is in letters approximately 1/16 of an inch high.
As indicated above, resolution of a fair-use defense
requires the court to focus on the defendant's (actual or
proposed) use. We see no indication that the district court
considered the advertisement mock-ups submitted by the parties
here, where given mock-ups could lend themselves to divergent
conclusions as to, inter alia, whether Abboud's name was being
used a trademark, whether consumers would likely be confused and
believe the "jaz" line comes from JA, and whether a particular
size and placement of Abboud's name in a mock-up evinced an intent
to confuse.

In the event that the district court does not rule in
favor of JA on the contract claim on remand, it will be required
to address the trademark issues.

## C. Other Issues

Defendants have raised other issues on this appeal,
including challenges to the dismissal of their defense of unclean
hands, the dismissal of their counterclaims based on the same
factual assertions, and the breadth of the permanent injunction

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issued by the district court. In light of our decision vacating
the judgment and remanding for further proceedings on the ground
that the district court's principal rationales were erroneous, we
decline to address these additional contentions, except to note
that an injunction of scope similar to that originally entered
would seem to be inappropriately broad if based solely on
trademark infringement rather than on breach of contract. The

district court is free on remand to revisit that matter, as well
as the other appellate issues raised by defendants and the claims
of JA that the court dismissed as duplicative of the claims on
which JA originally prevailed.

# CONCLUSION

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We have considered all of the parties' arguments in
support of their respective positions on this appeal and, except
to the extent indicated above, have found them to be without
merit. The judgment of the district court is vacated, and the
matter is remanded for further proceedings not inconsistent with
this opinion.

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JA Apparel Corp. v. Joseph Abboud et al., No. 08-3181-cv
SACK, Circuit Judge, concurring.

I concur in the panel's opinion with respect to JA
Apparel Corp. 's Lanham Act claim. I concur in the result with
respect to the contract claim, but depart from the panel's
reasoning. While I agree that the term "names" -- as it appears
in | 1.1 (a) (A) of the Agreement of Purchase and Sale dated June
16, 2000 ( "Sale Agreement") -- is ambiguous, I would,
respectfully, reach that conclusion by a different route.

In | 1.1 (a) , Joseph Abboud promised to "sell, convey,
transfer, assign and deliver to [JA Apparel]
all of [his]
right, title and interest in and to, " inter alia,

(A) The names, trademarks, trade names,
service marks, logos, insignias and
designations identified on Schedule
1.1 (a) (A), and all trademark registrations
and applications therefor, and the goodwill
related thereto (collectively, the
"Trademarks") . . . and all other
Intellectual Property (as hereinafter
defined) .

(B) All licenses to use the Trademarks
granted by [Abboud]

(C) All rights to use and apply for the
registration of new trade names, trademarks,
service marks, logos, insignias and
designations containing the words "Joseph
Abboud, " "designed by Joseph Abboud, " "by
Joseph Abboud, " "JOE" or "JA, " or anything
similar to or derivative thereof, either
alone or in conjunction with other words or
symbols (collectively, the "New Trademarks") ,
for any and all products and services.

Sale Agreement | 1.1 (a) (underline in original). Schedule
1.1 (a) (A) to the Sale Agreement contains a five-page list of
trademarks -- the words "Trademark Report by Mark" appear at the
top left corner of each page -- including, for each listed mark,
information such as the countries of registration, reference
numbers, dates filed, and registration numbers. A sixth page
consists of a "Filing Receipt for Trademark Application" for a
mark containing "the words JOSEPH ABBOUD." The question before
us is whether the term "names" in | 1.1 (a) (A) is ambiguous.

JA Apparel asserts that | 1.1 (a) (A) unambiguously
conveys to it, through that term, rights to Abboud's personal
name, at least for commercial purposes. Abboud insists that it
unambiguously conveys rights to Abboud's trade and service marks
only. The parties have staked the expense of a trial and an
appeal on their positions. The district court initially thought
both interpretations were plausible enough to warrant a trial on
the contract claim. After a bench trial, however, the court
decided | 1.1 (a) (A) was not ambiguous, agreeing with JA Apparel's
interpretation of the words at issue. This rendered the "fairly
extensive" extrinsic evidence the court had received "legally
irrelevant." JA Apparel Corp. v. Abboud, 591 F. Supp. 2d 306,
318 & n.9 (S.D.N.Y. 2008) .

## I. Applicable New York Law

I would settle the question whether | 1.1 (a) (A) is
ambiguous by reference to several familiar rules of contract
interpretation used to determine "the manifest purpose" of the
parties to an agreement. In re Herzog, 301 N.Y. 127, 135, 93
N. E.2d 336, 339 (1950). When an agreement is "clear" and
"complete, " that purpose is determined by reference only to the
contract's terms: "Evidence outside the four corners of the
document as to what was really intended but unstated or misstated
is generally inadmissible to add to or vary the writing. " W. W. W.
Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157, 162, 566 N.E.2d
639, 642, 565 N. Y.S.2d 440, 443 (1990). When a contract term is
"reasonably susceptible to more than one interpretation, "
however, it is ambiguous as to the parties' intent. Andy Warhol
Found. for Visual Arts, Inc. v. Fed. Ins. Co., 189 F.3d 208, 215
(2d Cir. 1999) .

Whether a term is ambiguous is a matter of law for the
court to resolve. W.W.W. Assocs., 77 N.Y.2d at 162, 566 N.E.2d
at 642, 565 N. Y.S.2d at 443.1 If the court identifies an
ambiguity, the controlling meaning is determined by application
of principles of interpretation and construction under the
controlling state law. See, e.g., Wallace v. 600 Partners Co.,

1 " [C] lear contractual language does not become ambiguous
simply because the parties to the litigation argue different
interpretations. " Riverside S. Planning Corp. v. CRP/Extell
Riverside, L. P., 869 N.Y.S.2d 511, 517, 60 A.D.3d 61, 67 (1st
Dep't 2008) .

86 N.Y.2d 543, 548, 658 N.E.2d 715, 717, 634 N.Y.S.2d 669, 671
(1995) ; Rentways, Inc. v. O'Neill Milk & Cream Co., 308 N. Y. 342,
347, 126 N. E. 2d 271, 273 (1955) . Then, only if necessary,
extrinsic evidence of the parties' intent is employed. See
W.W.W. Assocs., 77 N. Y.2d at 163, 566 N.E.2d at 642, 565 N. Y.S.2d
at 443.

It is a generally accepted proposition that
where the terms of a writing are plain and
unambiguous, there is no room for
interpretation or construction
However, this formulation may be technically
overbroad, in the sense that the
interpretation of a contract requires an
initial determination of whether the contract
is ambiguous
and this determination
itself involves an assessment of the
contract's meaning.

Richard A. Lord, 11 Williston on Contracts § 30:4 (4th ed. 2008) .
At least some principles of interpretation therefore ordinarily
guide the inquiry into whether a contract term is ambiguous.

New York courts conducting the inquiry typically apply
three rules of interpretation.

First, they determine ambiguity by "examin [ing] the
entire contract and consider [ing] the relation of the parties and
the circumstances under which it was executed, " interpreting
" [p]articular words
not as if isolated from the context,
but in the light of the obligation as a whole and the intention
of the parties as manifested thereby. "
Kass v. Kass, 91 N.Y.2d
554, 566, 696 N.E.2d 174, 180-81, 673 N.Y.S.2d 350, 356-57 (1998)

(quoting Atwater & Co. v. Panama R.R. Co., 246 N.Y. 519, 524, 159
N. E. 418, 419 (1927) ) ; see also Eternity Global Master Fund Ltd.
v. Morgan Guar. Trust Co., 375 F.3d 168, 173 (2d Cir. 2004) ("An
ambiguity exists where the terms of a contract could suggest more
than one meaning when viewed objectively by a reasonably
intelligent person who has examined the context of the entire
integrated agreement and who is cognizant of the customs,
practices, usages and terminology as generally understood in the
particular trade or business." (internal quotation marks
omitted) ) .

Second, the New York courts apply the rule that each
term is to be assigned its "fair and reasonable meaning." Sutton
v. E. River Sav. Bank, 55 N.Y.2d 550, 555, 435 N.E.2d 1075, 1078,
450 N. Y. S. 2d 460, 463 (1982) (internal quotation marks omitted) ;
see also Bethlehem Steel Co. v. Turner Constr. Co., 2 N. Y. 2d 456,
459, 141 N.E.2d 590, 593, 161 N.Y.S.2d 90, 93 (1957) ("reasonable
and ordinary meaning") .

Third, they apply the rule "that a court should not
adopt an interpretation which will operate to leave a provision
of a contract without force and effect, " Corhill Corp. v. S. D.
Plants, Inc., 9 N.Y.2d 595, 599, 176 N.E.2d 37, 38, 217 N.Y.S.2d
1, 3 (1961) (citation, ellipsis, and internal quotation marks
omitted), i.e., the rule against surplusage.

For example, in R/S Associates v. New York Job
Development Authority, 98 N.Y.2d 29, 771 N.E.2d 240, 744 N.Y.S.2d
358 (2002), an opinion by then-New York Court of Appeals Judge
Wesley, the Court of Appeals addressed "the interpretation of the
term 'effective cost of funds' in a loan agreement" which
provided that the rate to be charged by the lender for the loan
in question "'may be revised from time to time but will not
exceed one and one half (1%%%) percent over [the lender's]
effective cost of funds. '" Id. at 31, 32, 771 N.E.2d at 241, 744
N. Y. S. 2d at 359. The purchaser and the lender disputed whether
the phrase "effective cost of funds" included -- in addition to
the interest on the bonds issued to finance the loan and the
direct costs of issuance -- "the cost of defaults by other
borrowers." Id. at 32, 771 N.E.2d at 241, 744 N. Y.S.2d at 359.
The purchaser argued that the phrase unambiguously excluded the
cost of defaults, the lender argued that the phrase unambiguously
included it. See id.

The Court of Appeals concluded that the phrase was
unambiguous and reasonably susceptible to only the lender's
proposed meaning. It reached that conclusion by applying the
reasonable meaning rule and the rule against surplusage:

Under its ordinary usage, the 'effective'
cost of the funds means the 'actual' cost of
securing such funds for a specific loan (see,
e. g., 5 Oxford English Dictionary 80 [2d ed
1989] . . . ). Regardless of borrower
defaults, the [lender] 's funding mechanism

required it to repay the underlying bond when
due. Thus, the 'actual' or 'effective' cost
of the funds loaned by the [lender]
necessarily included the interest it had to
pay to the bondholders, the cost of issuing
the bond, and the cost of defaults by the
borrowers who received loans from bond
proceeds. Any other interpretation of this
agreement would ignore the import of
"effective" in modifying "cost of funds. "

Id. at 33, 771 N.E.2d at 242, 744 N.Y.S.2d at 360 (some emphases
added, some emphases in original omitted) .

The ambiguity inquiry commonly involves the application
of these three rules. See also Golden Gate Yacht Club v. Societe
Nautique De Geneve, -- N. Y. 3d -- , -- N. E. 2d -- , -- N. Y. S. 2d -- ,
2009 N.Y. Slip Op. 02480, at 6 (Apr. 2, 2009) ("Taken as a whole,
we conclude that the settlor intended to link the annual regatta
requirement to the other eligibility requirements
Any
other interpretation would render the annual regatta requirement
a nullity.
We conclude there is no ambiguity as to the
annual regatta clause at issue. ") ; S. Road Assocs., LLC v. IBM
Corp., 4 N.Y.3d 272, 277-78, 826 N.E.2d 806, 809, 793 N.Y.S.2d
835, 838 (2005) (concluding that a lease read "as a whole"
reflects that "the term 'premises' refers only to the interior
space" of the leased real property, because " [t]he lease
repeatedly mentions the 'premises' separately from the water
tower, appurtenances, land, parking lot [, ] and building, " which
language "would be superfluous" if the term "premises" covered
those exterior areas) ; Kass, 91 N. Y.2d at 568, 696 N.E.2d at 181,

673 N. Y. S. 2d at 357 (rejecting appellant's proposed reading of
consent clause because " [a]ppellant's construction ignores
words that also must be given meaning") ; Riverside S. Planning
Corp. v. CRP/Extell Riverside, L. P., 869 N.Y.S.2d 511, 516-17, 60
A.D.3d 61, 67 (1st Dep't 2008) ("In the instant case, the
ordinary and natural meaning of the [contract's] words [is]
dispositive
A plain reading
makes clear that 10
years is the maximum term of the contract at issue
We
note that clear contractual language does not become ambiguous
simply because the parties to the litigation argue different
interpretations . ") . 2

II. Application to | 1.1 (a) (A)

Again, 1 1.1 (a) (A) conveys to the plaintiff

[t]he names, trademarks, trade names, service
marks, logos, insignias and designations
identified on Schedule 1.1 (a) (A), and all
trademark registrations and applications
therefor, and the goodwill related thereto
(collectively the "Trademarks") . . . and all
other Intellectual Property (as hereinafter
defined) .

Sale Agreement | 1.1 (a) (A) (underline in original) . The parties
each contend that the term "names" in | 1.1 (a) (A) means something

2 The rule against surplusage is said to be a rule "of
preference in interpretation, " Restatement (Second) of Contracts
§ 203 (1981) , which applies only after it is established that a
term has more than one reasonable interpretation, see id. cmt. a.
As the cited cases illustrate, however, New York courts
nonetheless apply the rule in the inquiry whether a term is
ambiguous.

different. But the rules of interpretation applied by the New
York courts support both parties' proposed meanings. It is for
this reason that I would conclude the term "names, " as used in
the Sale Agreement, is ambiguous.

### A. JA Apparel's Proposed Meaning

1\. Application of the Rules of Interpretation. The
plaintiff argues that the term "names" in | 1.1 (a) (A) denotes
Joseph Abboud's personal name itself, not a mark related to his
name. As the district court concluded, application of the rule
against surplusage makes this interpretation reasonable.

Pursuant to that rule, the term "names" must be given a meaning
different from the meaning of the other properties listed by
[ 1.1 (a) (A) ; otherwise the term "would be superfluous." S. Road
Assocs., 4 N.Y.3d at 278, 826 N.E.2d at 809, 793 N.Y.S.2d at 838.
So the term must refer to intellectual property other than that
which is subsequently referred to in the paragraph, i.e., other
than a "trademark [], " for example, or a "trade name [] " or
"service mark [] . " Sale Agreement | 1.1 (a) (A) . 3 From the
ordinary usage of the term "name," it is reasonable to conclude
that the other intellectual property in question is Abboud's
personal name. See The American Heritage Dictionary of the

3 Abboud is therefore wrong to assert that | 1.1 (a) (A)
"do [es] not mention, manifest or express any intent to sell the
exclusive right to use Abboud's name, other than as a trademark. "
Defs.' Br. 31.

English Language 1167 (4th ed. 2000) (defining "name" principally
as " [a] word or words by which an entity is designated and
distinguished from others") . 4

Reading the Sale Agreement as a whole supports this
result. Paragraph 1.1 (a) (C), quoted in full at the outset of

4 It also seems to me that although the rule against
surplusage is said to apply not only to contract provisions, see
Corhill Corp., 9 N.Y.2d at 599, 176 N.E.2d at 38, 217 N.Y.S.2d at
3, but to particular words within a contract provision, see,
e.g., Kass, 91 N.Y.2d at 568, 696 N.E.2d at 181, 673 N.Y.S.2d at
357, the rule should nonetheless be applied with a grain or two
of salt when examining a list of words having similar or even
overlapping meaning in a commercial agreement. Such an
itemization of terms may reflect an intent to occupy a field of
meaning, not to separate it into differentiated parts. Indeed,
this is a common -- perhaps all-too-familiar -- technique used in
drafting agreements, commercial and otherwise. With this
technique, words are used more like the brush strokes of a house
painter than of those of a portrait painter -- each intended
principally to ensure that the surface is covered, not to convey
a separate piece of information. See, e.g., Sale Agreement 1
1.1 (a) (providing that "the Sellers shall sell, convey, transfer,
assign, and deliver" the "right, title and interest in and to"
the properties in question) ; In re Luxotica Group S.p. A. Sec.
Litig., No. CV 01-3285 (JBW) (MDG), 2005 WL 3046686, *1, 2005 U.S.
Dist. LEXIS 27765, *11 (E.D.N.Y. Nov. 15, 2005) (in the case of a
specified event, "the Stipulation, including any amendment (s)
thereof, . . . shall be null and void, of no further force or
effect, and without prejudice to any party, and may not be
introduced as evidence or referred to in any actions or
proceedings by any person or entity, and each party shall be
restored to his, her or its respective position as it existed
prior to the execution of the Stipulation") ; In re Host Am. Corp.
Sec. Litig., No. 05-CV-1250 (VLB), 2008 U.S. Dist. LEXIS 94194,
\*17 -\* 18 (D. Conn. Nov. 19, 2008) (similar) (not available on
Westlaw). A "house painter" analysis of | 1.1 (a) (A) also
supports JA Apparel's reading of "names" as meaning something
different from "trademarks": listing all possible types of the
mentioned intellectual property may be taken to signal an
intention not to restrict the denotation of the listed terms to
one type only.

this opinion, contains a list of intellectual property strikingly
similar to that in | 1.1 (a) (A) but omits the term "names" with
which the list in | 1.1 (a) (A) begins. See Sale Agreement 1
1.1 (a) (C) (conveying " [a] ll rights to use and apply for the
registration of new trade names, trademarks, service marks,
logos, insignias and designations containing ['Joseph Abboud' and
similar words] ") . That "names" appears in one list but not the
other suggests that the parties and their counsel took deliberate
care to include the term in | 1.1 (a) (A) so as to convey an
interest in something other than trademarks, trade names, and the
like.

2\. The Panel Majority's Analysis. The panel majority
concludes that the term "names" is reasonably susceptible to JA
Apparel's proposed interpretation because the term "is unadorned
and . . . the name 'Joseph Abboud' is used many times in Schedule
1.1 (a) (A)." Supra at 15. I find both reasons problematic.

To be sure, the term "names" in | 1.1 (a) (A) is
"unadorned" in the sense that it has no modifiers. But that does
not alone render either party's proposed meaning a reasonable
one.

Schedule 1.1 (a) (A), attached to the Sale Agreement and
referred to in | 1.1 (a) (A) , does not support JA Apparel's
reading, because the name "Joseph Abboud, " as a personal name,
appears nowhere in the schedule. The schedule is a list of
marks. The heading of each page reads: "Trademark Report by

Mark." The schedule lists categories of marks by name in bold-
face capital letters, with each mark in the category set forth
along with its registration information. So, while the schedule
contains, among many other things, the words "Joseph Abboud, "
those words are mentioned only as a mark or a part of a mark,
reflecting a trademark property related to "Joseph Abboud, " not
Joseph Abboud's personal name or whatever property right he may
have in it.

## B. Abboud's Proposed Meaning

### 1. Application of the Rules of Interpretation.

According to Abboud, the term "names" in | 1.1 (a) (A) denotes only
trademarks or service marks and therefore does not convey rights
to his personal name. The ordinary-meaning rule yields Abboud's
interpretation. The interpretation flows not from the ordinary
usage of the term "names, " which, of course, can be used to refer
to personal names and property interests in them, but from the
appearance of the term in context: " [t]he names, trademarks,
trade names, service marks, logos, insignias and designations
identified on Schedule 1.1 (a) (A) ." Sale Agreement | 1.1 (a) (A)
(underline omitted). Because, as noted, Schedule 1.1 (a) (A)
appears to identify only marks, not personal names, and the
schedule "identifie [s] " what is conveyed by the Sale Agreement in
1 1.1 (a) (A) , it seems to me reasonable to conclude that what is
conveyed by | 1.1 (a) (A) is only marks, and not the personal name
of Joseph Abboud or his property rights in it. The text in

1 1.1 (a) (A) therefore is reasonably susceptible to Abboud's
proposed interpretation.

The rule against surplusage supports this reading. The
phrase "Trademark Report by Mark, " which is the page heading of
the first five pages of Schedule 1.1 (a) (A), must be given
meaning. And if it is to mean nothing more than, as it says, a
set of marks, then it cannot also mean personal names. If,
departing from Abboud's interpretation, one does not restrict
"names" and its surrounding terms to the property identified by
Schedule 1.1 (a) (A), and does not interpret that property to
include only marks, one thereby "ignore [s]
words that
must be given meaning, " Kass, 91 N. Y.2d at 568, 696 N.E.2d at
181, 673 N. Y.S.2d at 357, albeit words in a schedule and not the
body of the agreement. 5

This application of the ordinary-meaning rule and the
rule against surplusage is bolstered by | 3.6 of the contract,
which states that "Schedule 1.1 (a) (A) sets forth a list of all of
the trademark registrations, service mark registrations and
applications and copyright registrations and applications
currently used by [Abboud] in connection with the Trademarks."

5
Thus, the rule against surplusage counsels both in favor
of interpreting the term "names" as denoting property other than
the trademarks, service marks, and the other types of property
listed in | 1.1 (a) (A) and in favor of interpreting the term as
merely an instance of the more general category of trademark as
set forth in Schedule 1.1 (a) (A) .

Sale Agreement | 3.6 (underline omitted) . That list omits any
mention of personal names.

2\. The Panel Majority's Analysis. The panel majority
looks to Schedule 1.1 (a) (A), as the text of | 1.1 (a) (A)
instructs, and concludes that its listing "plainly did not
exhaust Abboud's right to use his name in the future." Supra at
16\. I agree. But I am less certain about the panel's view that
"brand names [i. e., marks] are similar to the items immediately
following the word 'names' in [1 1.1 (a) (A) ], to wit 'trade names,
service marks, logos [ and] insignias. '" Supra at 15. I think
that the rule against surplusage requires the term "names" to
have a meaning different from the words in that list.6

The panel majority also observes that the defined term
"the ' Trademarks'" -- which collectively identifies property
conveyed in | 1.1 (a) (A) -- "would seem to connote existing or
pending uses." Id. But I would think that drafters define terms
in contracts in order to avoid speculative meanings. The term
"the 'Trademarks, '" as defined, "connote [s] " nothing more than

6 If the panel is suggesting that Abboud's proposed meaning
is supported by application of the canon noscitur a sociis,
pursuant to which "a word is given more precise content by the
neighboring words with which it is associated, " United States v.
Williams, 128 S. Ct. 1830, 1839 (2008); see also Harris v.
Allstate Ins. Co., 309 N.Y. 72, 76, 127 N.E.2d 816, 818 (1955)
(applying canon), I disagree. Even if the canon applies in the
ambiguity inquiry, under the majority's reasoning it would stand
for the proposition that the term "names" should denote
"trademarks" and therefore have an identical denotation to the
terms with which it appears. I am aware of no such application
of noscitur a sociis.

the set of terms it is defined to mean; it tells us nothing about
how to interpret the terms that define it, including the term
"names. 17

Finally, the Court finds significance in the language
of | 1.1 (a) (C), which conveys

[a]ll rights to use and apply for the
registration of new trade names, trademarks,
service marks, logos, insignias and
designations containing the words "Joseph
Abboud, " "designed by Joseph Abboud, " "by
Joseph Abboud, " "JOE" or "JA, " or anything
similar thereto or derivative thereof, either
alone or in conjunction with other words or
symbols (collectively, the "New Trademarks" ) ,
for any and all products or services.

Sale Agreement | 1.1 (a) (C) (emphasis added). I do not see how
this text tells us whether Abboud transferred the rights to his
personal name by including the term "names" in | 1.1 (a) (A) . The
term is absent from | 1.1 (a) (C). If [ 1.1 (a) (A) did transfer to
JA Apparel the right to use Abboud's personal name along with the
listed trademarks, 1 1.1 (a) (C) would still be necessary -- or at
least advisable -- to ensure the transfer of the separate right
to use and apply for "new trade names, trademarks, service marks,
logos, insignias and designations containing the words 'Joseph
Abboud' [and associated combinations] ." The rights in question
-- the right to use a personal name for commercial purposes and

7 Schedule 1.1 (a) (A) employs the terms "Trademark" and
"Mark, " but not the specially defined term "the ' Trademarks . '"
Abboud's interpretation of the schedule is therefore unaffected
by the defined term.

the right to apply for and use a new trademark containing the
words of that name -- are different and independent.

It seems to me that if Joseph Abboud sold the right to
use his personal name as a personal name, the purchaser could
open and run and advertise a clothing line called "Joseph Abboud
Men." And if he already owned the mark "Joseph Abboud Men, " and
sold it, the purchaser would then have the right to use that term
as a mark. But I do not think it necessarily follows from either
hypothetical transaction that the purchaser could then have the
exclusive right to apply for and use, as marks, new trademarks
made up of or derived from the words Joseph Abboud, e.g., "Joseph
Abboud Women. " Without an explicit sale of the right to apply
for and use, as marks, new marks similar to or including his
personal name, I should think both Abboud and the purchaser might
each apply for such marks, and the rightful owner of that
property would be determined by application of ordinary
principles of trademark law.

For these reasons, the drafter's decision to cover the
use of the name Joseph Abboud in the context of new trademarks in
1 1.1 (a) (C) does not seem to me to indicate that the parties
meant not to transfer the use of the name along with existing
trademarks in | 1.1 (a) (A) .

## D. The Ambiguity

In my view, the rules of interpretation do not
conclusively establish the reasonableness of one party's

interpretation over the other in this case; they yield both
interpretations as plausible results. And, as I have suggested,
I think that both proposed resolutions do at least some violence
to the rules of interpretation. The rules therefore leave us
with an ambiguity that they are insufficient to resolve. I
therefore agree with the panel majority that the district court
should now consider whether extrinsic evidence will shed light on
the matter, and if so, employ it to determine the meaning of the
language in dispute.

### III. Conclusion

For the foregoing reasons, I concur in the result
reached by the panel majority.

JA Apparel Corp. v. Abboud

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