0T&

JS 44C/SDNY
REV. 4/2014

JUDGEH!: LERSTEIN

CIVIL COVER SHEET

l i W 7976

The JS-Wt civil cover sheet and the information contained herein neither replace nor supplement the filing and service of
pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the

Conference of the United States in September 1974, is required for use of the Clerk of Court for the purpose

Judicial

initiating tpe civil docket sheet.

PLAINTIFFS

- OCT 0 9 2015

DEFENDANTS

FRENCH CONNECTION LIMITEC

TPR HOLDINGS LLC

ATTORNEYS (FIRM NAME, ADDFlESS, AND TELEPHONE NUMBER

ATTORNEYS (IF KNOWN)

BAKER & MCKENZIE LLP, 452 F FfTH AVE. NEW YORK, NY 10018

DAVID ZASLOWSKY

(212) $26-4100

CAUSE OF ACTION (CITE THE U

CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE A BRIEF STATEMENT OF CAUSE)

(DONOTCIT

JURISDICTIONAL STATUTES UNLESS DIVERSITY)

Thisaction involves a federal dji^estion under the Lanham Act, 15 U.S.C. 1051 et seq., and diversity jurisdiction under 28 U.S.C. 1332.

rfg, or one essentially the same been previously filed in SDNY at any time? NoZJ/esIbudge Previously Assigned

Has this action, case, or proceedii

If yes, was this case Vol.Q Invo | | Dismissed. No [~J Yes Q

IS THIS AN INTERNATIONAL ARBITRATION

No 0

If yes, give date

&Case No.

Yes
NATURE OF SUIT

(PLACEAN [x] IN ONE BOX ONLY)

ACTIONS UNDER STATUTES

TORTS

INJURY

PERSONAL INJURY

FORFEITURE/PENALTY

BANKRUPTCY

OTHER STATUTES

[ ] 422 APPEAL

I I 375 FALSE CLAIMS

[ ] 400 STATE

[ J 367 HEALTHCARE/
I 1110
[ ]120
11130
[ 1140
I 1150

I ] 151
[ ] 152

INSURANCE

AIRPLANE

PHARMACEUTICAL PERSONAL , , 625 DRUGRELATED

MARINE
MILLER ACT
NEGOTIABLE
INSTRUMENT
RECOVERY OF
OVERPAYMENT &
ENFORCEMENT
OF JUDGMENT
MEDICARE ACT

AIRPLANE PRODUCT

INJURY/PRODUCT LIABILITY

LIABILITY

ASSAULT, LIBELS
J LANDER
FIIDERAL
EMPLOYERS'

LIABILITY

RECOVERY OF

MDTOR VEHICLE
MDTOR VEHICLE

STUDENT LOANS

(EXCL VETERANS)

[ ]195

INJURY
RSONAL INJURY -

362 P

M ED MALPRACTICE

ACTIONS UNDER STATUTES

[ ]240
[ ]245
[ ]290

[ ] 370 OTHER FRAUD

[ ]371 TRUTH IN LENDING

SOCIAL SECURITY

] 410
] 430
] 450
J 460
] 470

CIVIL RIG ITS

LABOR

PROPERTY DAMAGE

[ ] 385 PROPERTY DAMAGE

VACATE SENTENCE

[ J 530 HABEAS CORPUS

[ ] 635 DEATH PENALTY
[ ] 540 MANDAMUS & OTHER

iNon-Prisoner)

)441 VCTING
[ ) 442 EMPLOYMENT
\ i 443 HC USING/

FORECLOSURE

RENT LEASE &

EJECTMENT
TORTS TO LAND

ACCOMMODATIONS

[ ] 445AMERICANS WITH
SABILITIES-

k/IPLOYMENT

TORT PRODUCT

[ ] 446 AMERICANS WITH

LIABILITY
ALL OTHER

[ ] 448 t0UCATION

ANTITRUST
BANKS& BANKING
COMMERCE
DEPORTATION
RACKETEER INFLU
ORGANIZATION ACT

(RICO)
( ] 480 CONSUMER CREDIT
[ ] 490 CABLE/SATELLITE TV

[ ] 850 SECURITIES/
COMMODITIES/

[ ] 380 OTHER PERSONAL

[ ] 710 FAIR LABOR

STANDARDS ACT

[
[
[
[
[

[ ] 740 RAILWAY LABORACT

[ ] 751 FAMILY MEDICAL
LEAVE ACT (FMLA)

[ ] 790 OTHER LABOR

LITIGATION

[ ] 791 EMPL RET INC

SECURITY ACT (ERISA)
IMMIGRATION

PRISONER CIVIL RIGHTS

[ ] 462 NATURALIZATION
[ ] 550 CIVIL RIGHTS
[ ] 555 PRISON CONDITION
[ ] 560 CIVILDETAINEE

]861
] 862
] 863
] 864
] 865

HIA(1395ff)
BLACKLUNG (923)
DIWC/DIWW (405(g))
SSID TITLE XVI
RSI (405(g))

EXCHANGE

] 890 OTHER STATUTORY

ACTIONS

RELATIONS

28 USC 2255

REAL PROPERTY

[ J 220
[ J 230

REAPPORTIONMENT

[
[
[
[
[

ENCED & CORRUPT

[ ] 463 ALIEN DETAINEE

[ ) 510 MOTIONS TO

[ ]440 OTHER CIVILRIGHTS

LAND
CONDEMNATION

PROPERTY RIGHTS

PRISONER PETITIONS

LIABILITY

[ 1210

28 USC 157

[ ] 820 COPYRIGHTS
[ ] 830 PATENT
fc] 840 TRADEMARK

PERSONAL PROPERTY

[ ] 720 LABOR/MGMT

SUITS
OTHER
CONTRACT
CONTRACT

[ ]196 FRANCHISE

INJURY PRODUCT
LIABILITY

PRODUCT LIABILITY

STOCKHOLDERS

PRODUCT

[ ) 423 WITHDRAWAL

[ ]368 ASBESTOS PERSONAL ' ' 69 0THER

F RODUCT LIABILITY

BENEFITS

[ ]160

21 USC 881

, , RQn nTHFR

360 OTHER PERSONAL

RECOVERY OF
OVERPAYMENT

OF VETERAN'S

[]190

PRODUCT LIABILITY

28 USC 158

LIABILITY
340M\3INE
345M^IN E PRODUCT

DEFAULTED

[ ]153

[ ] 365 PERSONAL INJURY

SEIZURE OF PROPERTY

APPLICATION

[ ] 465 OTHER IMMIGRATION

J 891 AGRICULTURAL ACTS

FEDERAL TAX SUITS

[ ] 870 TAXES (U.S. Plaintiff or

] 893 ENVIRONMENTAL

Defendant)
[ ]871 IRS-THIRD PARTY

] 895 FREEDOM OF

MATTERS
INFORMATION ACT

26 USC 7609

] 896 ARBITRATION
) 899 ADMINISTRATIVE
PROCEDURE ACT/REVIEW OR
APPEAL OF AGENCY DECISION

[ ] 950 CONSTITUTIONALITY OF
STATE STATUTES

ACTIONS

CONDITIONS OF CONFINEMENT

SABILITIES -OTHER

REAL PROPERTY

Check if demanded in complai i f:

CHECK IF THIS IS ACLA$B ACTION

DO YOU CLAIM THIS CASE IS RELATED TO A CIVIL CASE NOW PENDING IN S.D.N.Y.?

UNDER F.R.C.P. 23

DEMAND $

OTHER

JUDGE

DOCKET NUMBER

Check YES onlyifdemandedin compl:

hint

JURY DEMAND: DYES lxjN

NOTE: You must also submit at the time of filing the Statement of Relatedness form (Form IH-32).

(PLACE AN x IN ONE BOXONLY)

S 1 Original

Proceeding

ORIGIN

D 3 Remanded D 4 Reinstated or

Remo /isd from

state Court

from

| I 5 Transferred from LJ 6 Multidistrict

(Specify District)

Reopened

I I 7 Appeal to District

Litigation

Judge from
Magistrate Judge
Judgment

Appellate

| | 3. all paft:ies represented

Court

I | b. At Hast one
party i

pro se.

(PLACEAN X IN ONE BOX ONLY)

1 U.S. PLAINTIFF

BASIS OF JURISDICTION

DEFENDANT [x] 3 FEDERAL QUESTION

Q2 U

IF DIVERSITY, INDICATE

4 DIVERSITY

CITIZENSHIP BELOW.

(U.S. NOT A PARTY)

TIZENSHIP OF PRINCIPAL PARTIES (FOR DIVERSITY CASES ONLY)

(Place an [X] in one box fo Plaintiff and one box for Defendant)
PTF

DEF

PTF

DEF

CITIZEN OF THIS STATE

[ ]1

[ ]1

CITIZEN OR SUBJECT OF A
FOREIGN COUNTRY

M 3 [ ]3

INCORPORATED and PRINCIPAL PLACE

OF BUSINESS IN ANOTHER STATE

I ]5

[]5

CITIZEN OF ANOTHER STATE

[ ]

[ ]2

INCORPORATED or PRINCIPAL PLACE

OF BUSINESS IN THIS STATE

[ ] 4 [ *4

FOREIGN NATION

[ ]6

[ ]6

PTF DEF

PLAINTIFF(S) ADDRESS(ES) f ND COUNTY(IES)

FRENCH CONNECTION

LIMITED

20-22 BEDFORD ROW

LONDON WC1R4JS
ENGLAND

DEFENDANT(S) ADDRESS(E$) AND COUNTY(IES)

TPR HOLDINGS LLC
950 THIRD AVENUE
3RD FLR

NEW YORK, NEW YORK, 10022

DEFENDANT(S) ADDRESS L NKNOWN
REPRESENTATION IS

HEREEY
MADE THAT, AT THIS TIME, I HAVE BEEN UNABLE, WITH REASONABLE DILIGENCE, TO ASCERTAIN
""

RESIbENCE ADDRESSES OF THE FOLLOWING DEFENDANTS:

Check one:

THIS ACTION
(DO NOT check ei

EiHOULD BE ASSIGNED TO:

WHITE PLAINS

[x] MANHATTAN

box if this a PRISONER PETITION/PRISONER CIVIL RIGHTS

COMPLAIN

DATE

siq(NA\ru

ADMITTED TO PRACTICE IN THIS DISTRICT

! I NO

M YES (DATE ADMITTED Mo.Ju'y

Attorney Bar Code # DZ-5182

RECEIPT #

Magistrate Judge is to be

designated by the Clerk of the Court.

Magistrate Judge

Ruby J. Krajick, Clerk of C^jjrt by

MAG. JUDGE FRANCIS

Deputy Clerk, DATED.

UNITED STATES DISTRICT (tpURT (NEW YORK SOUTHERN)

is so Designated.

Yr. 1985

JUDGE HELLERSTEIfil
David Zaslowsky
BAKER & McKEjNfelE LLP

Attorneys for Plaimiff

15 * 7976

French Connection Limited

452 Fifth Avenue

New York, New Yckk 10018

Tel: (212) 626-4100
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

French Connection Limited,

Plaintiff,
-aga: hst-

CASE NUMBER:

TPR Holdings LLC (f/k/a Zirh Holdings LLC),

COMPLAINT

Defendant.

Plaintiff French Connection Limited (hereinafter "Plaintiff or "French Connection"), by

its attorneys Baker &. McKenzie LLP, for its complaint against Defendant TPR Holdings LLC
(hereinafter" Defendant"

1.

French

or "TPR"), alleges as follows:

, -Z,

Connection is a corporation organized and existing under the laws of England and

Wales with

is principal place of business in London, England,

2. Upon information and belief, TPR is a corporation organized and existing under the laws
of New York and has its principal place of business at 950 Third Avenue, 3rd Floor, New
York, NY 10022.
3.

The court his

original jurisdiction over the subject matter of this action pursuant to 28

U.S.C. 13^31
Lanham Ac

pursuant to

and 1338(a) as this action involves a federal question pursuant to the

15 U.S.C. 1051 et seq. This court also has jurisdiction over the claims

M U.S.C. 1332, diversity of citizenship, and 28 U.S.C. 1367, the amount

in controversy exceeding $75,000 and Defendant and Plaintiff being a citizen of a State

4.

and a citizen

of a foreign state, respectively.

TPR resides

in this district. Venue is proper under 28 U.S.C. 1391 and Section 17.2 of

the License

which expressly provides that it shall be subject to and interpreted in

ddtli New York law, and the Parties consent to and subject themselves to the

accordance

exclusive jurisdiction

of the federal courts within New York.

Background

5.

French Connection

appealed to
6.

broad market.

French Con; lection

ion
Connection

7.

was founded in 1972 to create well-designed, stylish clothing that

is

has since worked hard to build on that vision and as a result, French

synonymous with fashion and style.

French Connection
FCUK trademarks

is the registered proprietor of the FRENCH CONNECTION and

(the "Licensed Marks") and brand names and is engaged in the design,

production end distribution of branded fashion clothing.

8.

French Connection';
ion's

innovative

long history of success has been based on design quality and

fashion, supported by a strong market presence resulting in one of the most

highly recognized and respected clothing brands in the UK and across the world,
9.

French Conihbction

has retail stores in various countries around the world selling clothing

and complementary products,

10. Its globally -i^cognized FRENCH CONNECTION and FCUK brands have been extended
successfully into complementary licensed products including men's and women's
toiletries and

fragrances, shoes, watches, handbags, jewelry, and eyewear which together

generate sub stantial

ial license royalty income.

11. These comp ementary products are sold pursuant to license agreements in brick-and-

stores and online shops by licensees, with approval of French Connection,

mortar retai

12. Upon information and belief, TPR is a NYC based investor and operator in the consumer

products industry

TPR's target investments include scalable mass and prestige

opportunities in the health, beauty and wellness categories.

13. Upon information and belief, TPR creates, develops, sells and distributes fragrance and
cosmetics

pf(>ducts.

14. Upon information and belief, TPR became interested in obtaining rights to use the
Licensed Mkk-ks
The License Agreement

15. French Connection and TPR entered into a written license agreement dated April 28,
2010 (the "Mcense")1

PR in exchange for royalty payments as well as other promises,

property to
16. TPR

and

under which French Connection licensed certain of its intellectual

acknowledged in the License that the Licensed Marks were famous and valuable

associated with substantial goodwill in connection with various products.

17. The License

territories

acknowledges that the Licensed Marks are registered trademarks in the

and

classes identified in a Schedule A thereto, which makes up part of the

License.

18. Under the Ljibense, TPR obtained the right to use the FRENCH CONNECTION mark in
the US and

Canada and to use the FCUK mark throughout the world, with the exception

of the United

Kingdom and Republic of Ireland.

19. TPR agreed at its own expense, to develop, manufacture or assemble, sell, market,
distribute, a<|ifvertise and promote the Licensed Products. See Section 6.2, License.
A copy of the License is annexed hereto as Exhibit A.

20. TPR also ajifeed

to perform its duties and obligations to develop Licensed Products "ofa

high quality that are at least comparable to similar items offered at comparable prices,
and of such

^tyle, appearance and distinctiveness so as to protect and enhance, and in no

manner reflect

adversely upon, the prestige of [Plaintiff] and the Licensed Marks and the

goodwill peftaining thereto." See Section 6.2(a), License.

21. French

Connection previously contracted with a separate company to grant an exclusive

license for

Hfre United Kingdom and Republic of Ireland for the creation, development,
sale and distribution of the certain products listed in a Schedule B to the

manufacture
License.

22. TPR was made aware of this previous license as it is expressed in the License itself, and
through communications with French Connection.
Defendant's Breaches of the License
23. Section 9.1

qfthe License provides for quarterly royalty payments of 4.5% of net sales.

The due dates

for the royalty payments are within 30 days of the completion of the

particular quarter (July 31, October 31, January 31 and April 30).
24. At the time

the License terminated, TPR had failed to pay the last quarterly royalty

payment foi the Quarter ending January 2015 (that had been due as of March 2, 2015).
That royalty payment has still not been made.
25. TPR has failed

to pay the royalty for the final quarter of the License ending April 2015

(which was iue by May 30, 2015),

26. Of the 20 ro yalty
27. Section 17 20

payments, 18 were not paid within the time provided for in the License,

of the License states that, "Time is of the essence under this Agreement."

28. Under Sectidn

8.5(c) of the License, TPR agreed to pay an advertising fee of one percent

of net sales.
29. With one

exception, TPR failed to pay the advertising fee on time.

30. TPR has fat ed and refused to pay the advertising fee for the period ending April 28,
2015.

31. Section 11.1

of the License Agreement required TPR to provide quarterly statements and

specified the} information to be included in such statements.

32. Under Section 11.1, such quarterly statements were to be signed and certified as accurate

by TPR's
French

chief

financial officer, or by another officer or official of TPR approved by

Conihbction in advance in writing (an "Authorized Officer").

33. TPR never

submitted a quarterly statement certified by its CFO oran Authorized Officer,

submitted a quarterly statement with all of the information required under

34. TPR never

Section 11.1
35. Section 11

of the License required TPR "complete the Monthly Reports Form as

attached at

Schedule F and deliver the same to Licensor within ten (10) days of the end of

each calendii" month."

36. TPR never submitted a monthly report form in the form attached as Schedule F.
37. With respect to the monthly report forms TPR did submit, 55 out of 60 were not
submitted within the 10-day period required by the License. The report for May 2010
was submitted more than one year late.
38. Section 11.3

of the License provides in part as follows:

At least once during each Annual Period, not later than 90 days after the end of
Licensor's

fiscal year, Licensee shall deliver to Licensor: (a) a statement,

signed and certified by Licensee's then regularly engaged independent certified

public accountant (or, if Licensee has no such regular engagement, by a
reputable independ ent certified public accountant), stating that it has examined
the Quarterly Statements submitted by Licensor during the prior fiscal year and
that such statements accurately reflect the information in the financial records
of the Licensor

39. TPR never submitted the statement referred to in Section 11.3

40. Section 7

2<: p)

of the License says that "Prior to the opening of each selling season,

Licensee and Licensor shall meet at Licensor's office in London where Licensee will

present

Licensor with a plan of distribution consistent with Section 7.2(a) hereof."

present "distribution plans" prior to the opening of each selling season, much

41. TPR did not

less did it do so at French Connection's London office.

42. Section 8.6

cf the License says that "Licensee shall prepare and submit to the Licensor a

marketing/plr^motion plan (the "Marketing/Promotion Plan") for each successive Annual

before the commencement of the last Quarterly Period of the current Annual

Period on or

Period."
43. TPR did not

submit a Marketing/Promotion Plan in each year of the License after the

first.
44. The License

provides that Licensed Products shall be distributed by TPR (directly or

indirectly thifou gh its distributors) only in the Territory, defined in Section 1.21 of the
License as

in respect of the 'FCUK' Licensed Mark, the world excluding the United

Kingdom arid Republic of Ireland."

45. During the tferm of the License, and currently, FCUK Licensed Products are presently
widely avai able throughout the United Kingdom both at brick and mortar retailers and
on the IntenkH
46. In or about

November 2014, FCUK Licensed Products were purchased from different

retailers at

locations in London, Manchester, Newcastle and Birmingham, United

Kingdom, including
i
Argos (a national low-end home and general merchandise retailer),
The Perfumlci Shop (a national discount perfume retailer), Savers (a national discount

fc

chain sellinig household goods and health and grooming products), TJ Hughes (a discount

department store) and Wilkinson (a regional low-end hardware and home goods store),
47. TPR is

awate of the availability of Licensed Products for sale throughout the United

Kingdom
48. Upon information and belief, TPR and/or its distributors is, and throughout the term of
the License

Has been, actively selling Licensed Products in the United Kingdom.

49. Section 2.5( c) of the License states that "any 'FCUK Licensed Products' sold by Licensee

distributors outside the European Union will be sold subject to a contractual

to Licensee
restriction
Ireland"

prohibiting the importation into the United Kingdom and the Republic of

(emphasis added).

50. Upon iinformation and belief, TPR sold Licensed Products to distributors outside the
European L iiion without the contractual restriction required by Section 2.5(c) of the
License

51. Section 7.2(a) of the License set forth certain criteria for the retail stores into which the
Licensed Products could be sold.

52. Upon infonbation and belief, TPR sold, and permitted its distributors to sell, Licensed
Products into
i

stores that did not meet the requirements of Section 7.2(a) of the License,

53. Section 7.2

(a) of the License includes the following provision: "Licensee shall impose

contractual

restrictions on its distributor(s) preventing them from distributing the

Licensed

Products to any retail store or outlet that does not meet the Criteria."

54. Upon info:nil ation and belief, TPR sold Licensed Products to distributors without the
contractual

bstriction required by Section 2.5(c) of the License,

55. Section 11 *<(a)

of the license provides:

Licensee, it its sole cost and expense, shall prepare and maintain, in

accordance with generally accepted accounting principles consistently applied,

complete arid" accurate books and records, in such manner and detail as will

allow accountants to perform an audit (specifically including, without

limitation the originals or copies of documents and supporting entries in the
books of ac count) covering all transactions arising out of or relating to this

Agreement,

^nd to monitor compliance by Licensee with all of its obligations

under this All

reement.

It also granted French Connection the right to have an independent auditor review TPR's
records to c<bhfirm

compliance with the License.

56. In the first

duarter of 2014, French Connection retained KPMG to conduct an audit

pursuant to

section 11.4(a) of the License. In breach of its obligations under the License,

TPR failed

and refused to provide KPMG with the records necessary for KPMG to

conduct a

fiill and complete audit.

57. TPR reg ulajrjly

contractual
58. French

made commitments to French Connection that it would perform its

Obligations by certain dates and then did not abide by those commitments.

Correction was repeatedly required to chase after TPR to submit reports required

under the

License and to pay its obligations under the License.

COUNT IDECLARATORY JUDGMENT

59. French Comection re-alleges each of the foregoing paragraphs as though fully set forth
herein.
60. Section 5.1

of the License defines the Term of the agreement as a five-year period

commencing on April 28, 2010, and terminating on the fifth anniversary thereof,
61. Section 5.2

provides, in relevant part, that the License "shall be renewed for a further

period of fiv|c| (5) years at the expiration ofthe Term subject to the following conditions:
5.2.2 The Licensee has not committed any material breach or persistent

breaches of this Agreement at any time during the Term;

5.2.3 The Licensee has performed its obligations under this Agreement to the

reasonable satisfaction of the Licensor,

62. By letter dawd January 20, 2015, TPR sought to renew the License.
63. By letter dotted January 22, 2015, French Connection rejected the renewal because, as
described

ab!4)ve, TPR had committed material and persistent breaches of the License and

because TPR

did not perform under the License to the reasonable satisfaction of French

Connection
64. The conduc;

described above constitutes material and persistent breaches of the License

by TPR.
65. Because of tijie conduct described above, French Connection was not satisfied with TPR's

performance of its obligations under the License,

66. Because of ihe conduct described above, TPR did not have the right to renew the License
for a further live-year term.

67. On March 1'3, 2015, French Connection's counsel wrote to TPR and stated, inter alia:

understanding that, as of April 29, 2015, TPR intends to conduct

It is FC's
itself as if trie License has been renewed. Such conduct will cause irreparable
harm to FC and FC plans to go to court to enjoin such conduct. Injunctive
relief will not , however, be necessary if TPR acknowledges that the License
terminates on April 28, 2015. Such acknowledgement will allow the parties to

know that, as of April 29, they are operating under the provisions of Section 13
of the Licensb

know by the close of business on Monday, March 23 whether

to conduct itself on and after April 29 as if the License has not
been terminated . If we do not hear from you by then, we will have to assume
that TPR do s not accept that the License will terminate on April 28, 2015 and
Please let us
TPR intends

will have no choice but to seek court intervention.

68. As stated in

the letter, French Connection was prepared to go into court to protect its

rights if TPIJ. did not agree that the License would terminate effective April 28, 2015.
69. TPR

responiflpd in a letter from its lawyers dated March 24, 2015. While reserving TPR's

rights to seek) damages, importantly, TPR's lawyers stated:

Beginning en April 29, 2015 TPR intends to conduct itself as if the License

has been tejrfminated (expressly reserving its rights pursuant to 13 of the

License), Accordingly, there will be no conceivable reason for FC to seek
injunctive ri ief.

Based on th s clear statement from TPR, French Connection did not seek injunctive relief
in April 201
70. Consistent with

wrote to TPR ,

the expiration of the License, on April 29, 2015, French Connection

reminded TPR that the License had expired on April 28, and reminded

TPR that, gotog forward, the parties' respective rights and obligations would be governed
by the termination
ion provisions in Section 13 of the License. TPR did not object,

71. Rather, upoji information and belief, for about five months, TPR indeed conducted itself
as if the LSbense

had been terminated.

For example, TPR and French Connection

corresponded with regard to TPR's schedule of Inventory in its possession, control or in

the process

of

manufacture, because Section 13 of the License gave French Connection

the right to purchase such Inventory,

72. The License
but Section

provided that TPR could sell Inventory not purchased by French Connection
3.4 made clear that "such sales shall be made only with the prior approval of

[French Coiiiiection]"
73. After almos;

five months of acting consistently with the License having been terminated,

on September 18, 2015, TPR wrote to French Connection and stated, "We never agreed
that the lice ise

is terminated. (In fact we believe our option is valid, has been exercised

and we contihue to hold the rights for the next 5 years),"

74. On October 2, 2015, French Connection learned that TPR had sold $402,000 worth of
French

Co Tnection

goods without ever seeking, much less

obtaining, French

Connection' 3 consent.
75. On or about October 2, 2015, TPR informed one of its customers that it would soon have

10

available for sale additional products with the Licensed Marks.

76. By reason
Connection

pursuant to

bf the foregoing, a real and actual controversy exists between French

and TPR, and French Connection is entitled to a declaratory judgment,
28 U.S.C. 2201, that the License expired on April 28, 2015.

COUNT IIBREACH OF CONTRACT - ROYALTIES AND ADVERTISING

77. French Connection re-alleges each of the foregoing paragraphs as though fully set forth
herein.
78. The License

is a binding and enforceable contract between TPR and French Connection.

79. French Connection

ion has performed all of the conditions, covenants, and promises required
by it to be p =rformed in accordance with the terms and conditions of the License.

80. TPR breachdd the License by failing to make all royalty payments required under Section
9 of the License.

81. TPR breached

the License by failing to make all advertising payments required under

Section 8.5( ) of the License.

82. Section 8.5

^fthe License required TPR to spend, each year, specified minimum amounts

on advertisi^]g, sales and promotion. Shortfalls in any given year were to be spent in the

following

year

as an additional amount. If there was a shortfall at the end of the License,

TPR was required to pay that amount to French Connection within 30 days of the end of
the License
83. At the end

sales and

:}f the License, there was a shortfall in the minimum spend on advertising,

promotion in an amount in excess of $964,000. TPR has breached the License

by failing to pay this amount.

84. French Connection has been damaged by TPR's failure to pay its obligations under the

11

License.

COUNT IIIBREACH OF CONTRACT

85. French

Connection re-alleges each of the foregoing paragraphs as though fully set forth

herein.

86. Under the License, TPR was obligated to pay 5.5 percent of net sales in royalty and
advertising payments

87. Upon information and belief, the amount that TPR reported as due for the period through
December 31, 201

was less than what was owed under the terms of the License, thereby

damaging French Connection

88. Under Sectibn
Products from TPR

3.1 of the License, French Connection had the right to purchase Licensed

kt a price to be determined as set forth in the License.

89. During the License term, French Connection purchased Licensed Product from TPR.
90. Upon

infonriation and belief, TPR charged French Connection a price higher than that

provided for in the License. French Connection has been damaged by TPR's charging French

Connection such higher prices

COUNT IVBREACH OF CONTRACT - REPORTS

91. French Comection re-alleges each of the foregoing paragraphs as though fully set forth
herein.

92. TPR breacr^d the License by failing to deliver Quarterly Statements and annual
statements.

93. A purpose of these reports was to permit French Connection to obtain independent
confirmation from

PR's outside accountants that the amounts TPR was paying in royalties were

12

the correct amounts owed under the License.

94. Because TPR. did not submit such reports, French Connection lost the benefit of this part

of its bargain and d^es not know whether TPR has underpaid under the License.

COUNT VPAYMENT OF INTEREST

95. French

Connection re-alleges each of the foregoing paragraphs as though fully set forth

herein.

96. Under Sectipn 9.5 of the License, TPR agreed that "any royalty payments which are due
and not paid on thb date due hereunder shall accrue interest at a rate of one and one-half

percent (1 1/2%) mbjnthly on the unpaid balance."

97. As a result of

TPR's failure to make timely royalty payments under the License, interest

is due at the agreed ikpon rate from the date each payment was due.

COUNT VIBREACH OF CONTRACT - AUDIT

98. French Comection re-alleges each of the foregoing paragraphs as though fully set forth
herein.
99. Section 11

of the License provided French Connection with the right to have an

independent auditoi inspect and audit TPR's record. In addition, Section 11.4(b) states:
If, as a result of any inspection and/or audit of Licensee's books and records or
otherwise, it is determined at any time and from time to time that Licensee's
payments tc Licensor hereunder were less than the amount which should have

been paid

with

correct and

respect to the audit period, Licensee shall make all payments to

eliminate any such underpayments (including interest payable under

Section 9.5) within ten (10) days after receipt of notice by Licensor. In addition, if
reveals an underpayment of 5% or more then Licensee shall
reimburse Licensor for all costs and expenses of Licensor and its representatives

the examination

incurred in

deficiency

connection with any inspection and/or audit pursuant to which the

was

discovered by Licensor.

13

100.

In Jtine 2015, French Connection retained KPMG to conduct such an audit,

KPMG's findings

ejxceed the 5% threshold defined in the License.

contractually oblig aied to bear the cost of these

101.

TPRI

Accordingly, TPR is

procedures,

has failed to pay these costs and French Connection has been damaged as a

result.

COUNT VIIBREACH OF CONTRACT - SECTION 13

102.

Frenlcjh Connection re-alleges each of the foregoing paragraphs as though fully set

forth herein.
103.

The

License is a valid, binding and enforceable contract between French

Connection and TPX.

104.

Sect: on

13 of the License sets forth the rights and obligations of the parties upon

termination of the License, which occurred on April 28, 2015.

105.

Frenqh Connection has performed all of its obligations under the License.

106.

TPR

has breached the License by failing or refusing to perform its obligations

under Section 13, dospiite TPR's ability to fully perform under the License,
107.

TPRf

License is a breach

failure and refusal to perform its obligations under Section 13 of the

<bf the terms of the License and deprives French Connection of the benefit of

the terms contained : n the License.

108.

French Connection has no adequate remedy at law with regard to Section 13 of

the License.
109.

Frenph Connection requests that this Court enter an order requiring TPR to

specifically perform its obligations under Section 13 of the License.

14

COUNT VIIILANHAM ACT VIOLATIONS

110.

French Connection re-alleges each of the foregoing paragraphs as though fully set

forth herein.

111.

In claiming that the License has been renewed and continuing to manufacture and

sell Licensed Products, TPR has admitted that it plans to use French Connection's Licensed
Marks without Frenlcth Connection's consent.
112.

The

icensed Marks are both valid and legally protectable.

113.

The

"CUK mark is registered with the United States Patent and Trademark

Office, Registration
114.

No. 3028227.

French Connection mark is registered with the United States Patent and

The

]Registration No. 3293682.

Trademark Office, $
115.

Frenldh Connection owns the FCUK and French Connection marks.

116.

TPR s

use of the Licensed Marks to identify goods without French Connection's

consent will cause i. likelihood of confusion.

117.

TPR

is presently using the Licensed Marks in commerce, in the sale and

advertisement of French Connection's products.

118.

The

broducts TPR sells and advertises are identical to French Connection's

products.
119.

TPRf^ sales and advertisement of products bearing the Licensed Marks after

expiration of the License are directly competing with French Connection's products bearing the
same marks.
120.

TPRl is infringing the Licensed Marks, as the License expired on April 28, 2015.

121.

As

result of TPR's persistent and material breaches of the License, French

15

Connection is likelv to succeed on the merits of its claims for breach of contract.

122.

TPRJ'k wrongful use of the Licensed Marks comprises an infringement of the

French Connection

as to the identity
which there is no

123.

Marks and is likely to cause confusion, mistake and deception to the public

and

origin of the goods, causing irreparable harm to French Connection for

aclbquate remedy at law.

By reason of the foregoing acts, TPR is liable to French Connection for trademark

infringement under 15 U.S.C. 1114.

124.

TPRf's use of the Licensed Marks to promote, market or sell products in

competition with

rench Connection constitutes unfair competition pursuant to 15 U.S.C.

1125(a). TPR's ubfair competition is causing irreparable harm to French Connection for which

there is no adequati remedy at law.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff French Connection seeks relief and demands judgment against
Defendant TPR as follows:
1.

On

2.

On

Count I, a Declaration that the License expired as of April 28, 2015.

Count II, damages in an amount to be determined at trial but currently

estimated to be in excess of $1.5 million.

3.

On Cbunt III, damages in an amount to be determined at trial.

4.

On Count IV, an Order requiring TPR to deliver to French Connection,

a. for each Quarterly Period under the License, the quarterly statement required
under Section 11.1 of the License; and

b. for ejich Annual Period under the License, in accordance with Section 11.3 of the
License, a statement, signed and certified by TPR's regularly engaged

16

independent certified public accountant (or, if TPR has no such regular

eng agement,

it has
year

by a reputable independent certified public accountant), stating that

examined the Quarterly Statements submitted by TPR during the prior fiscal

knd that such statements accurately reflect the information in the financial

records of TPR.
On

Count V, in an amount to be determined at trial equal to 1.5 percent interest

per month for each ate payment.

On Count VI, damages in an amount to be determined at trial.

7.

On

Cbunts VII and VIII, an injunction and order of specific performance against

TPR, as follows (wi|t|h defined terms to be as they are defined inthe License):
a.

Enjoining TPR its affiliates, agents, servants, employees, directors,

officers, attorneys, and all other persons in active concert or participation
with TPR from manufacturing or assembling, distributing, selling,
transferring, delivering, advertising, promotion and sourcing of Licensed
Products or componentry bearing a Licensed Mark. Notwithstanding the
foregoing, and subject to the other provisions of the Court's Order, current
work-in-process for which raw materials have been received and which
are the subject of existing confirmed orders, may be completed and sold
off in accordance with the terms of the License, but TPR may not place
any new orders with its vendors for Licensed Products.

Enjoining TPR its affiliates, agents, servants, employees, directors,

officers, attorneys, and all other persons in active concert or participation
with TPR from transferring, selling, delivering or otherwise disposing any
items in the Inventory list TPR provided to French Connection on July 22,
2015, as well as any other materials, goods, products or other items
bearing either the French Connection or FCUK marks, without first
obtaining from French Connection (in writing) consent to sell or dispose
of such items, goods or products.
All of the rights of TPR to use the Licensed Properties shall terminate
forthwith and shall revert immediately to French Connection and TPR no
longer shall have the right to use the Licensed Properties, or any variation
or simulation thereof, and shall discontinue all use of the Licensed

Properties, and promptly shall transfer to French Connection, at no cost to

French Connection, all registrations, filings and rights (not including

17

inventory) with regard to the applicable Licensed Properties which it may

have possessed at any time including, without limitation, French
Connection Beauty Corp.
French Connection shall have the option to cause TPR to immediately
transfer and assign to French Connection, all of the rights of TPR to any
and all Fragrances and Packaging Designs developed by or on behalf of
TPR for the Licensed Products for consideration equal to the unamortized
cost basis to TPR, measured on a ten (10) year amortization schedule, for
such Fragrances or Packaging Designs. TPR also agrees to use its best
efforts to obtain the consent of any third party required in connection with
any such assignment and to cooperate with French Connection and take
such other actions as may be reasonably necessary to carry out the terms
of Section 13.5(b) of the License.
All labels, tags, and packaging materials containing Licensed Property that
are not required to complete the aforesaid current work-in-process shall
be, at French Connection's option in its sole discretion, within 10 business
days of the exercise of such option, sent or shipped to French Connection
(at no cost to French Connection) or destroyed, with TPR providing proof
of such destruction to French Connection in the form of a sworn statement
or certificate.

ft TPR shall deliver to French Connection, within 10 business days, at no

cost to French Connection, all items such as designs, sketches, patterns,
photographs, advertisements, brochures, forms, and other materials
("Materials") in its possession relating to or bearing on the Licensed
Products, except such materials acquired by TPR for use in Licensed
Products as may be owned by TPR as specified in Section 10.1(a) of the
License.

From and after the date of this Order, TPR shall not use or

permit others to use any such items or other Materials, or any variations
thereof.

Unless such dates have already passed, on the last day of each month
during the period defined in Section 13.4 of the License, TPR shall
immediately deliver to French Connection a complete and accurate written
schedule of TPR's inventory of finished Licensed Products, related workin-process then on hand (including uncut piece goods and products and
materials in the process of manufacture), confirmed orders, and all
Packaging Materials, advertising and promotional materials and Business
Materials or other documents or items that bear the Licensed Marks or

French Connection's name, in TPR's possession or control or in the

process of manufacture for Licensee (collectively, "Inventory"). French
Connection thereupon shall have the option ("Inventory Option"),
exercisable by notice in writing delivered to TPR within twenty (20) days
after French Connection's receipt of the complete Inventory schedule, to

18

purchase (directly or through its Affiliates) all or any portion of the

Inventory at a purchase price equal to the lesser of TPR's direct cost as
carried on its books of account or the fair market value.

With respect to those items on which French Connection has exercised the
Inventory Option in accordance with its Notice dated September 14, 2015,
TPR shall (i) deliver forthwith to French Connection or its designee the
Inventory items in its possession, (ii) provide within five (5) business days
the dates on which it plans to deliver the Inventory items not yet in its
possession, such dates to be within sixty (60) days of this Order, and
(iii) with respect to the Inventory that is not yet in TPR's possession,
deliver same to French Connection or its designee on the dates provided in
(ii) above. French Connection shall pay TPR, at the prices set forth in the
July 22, 2015 spreadsheet listing the Inventory, for the Inventory items it
chooses to purchase within forty-five (45) calendar days following its
receipt thereof, provided that French Connection shall be entitled to
deduct as offset from such purchase price any amounts owed to French
Connection by TPR (and/or to direct payment for any part of such
Inventory to any supplier of Licensed Products in order to reduce an
outstanding balance due to such supplier from TPR).
If French Connection does not exercise the Inventory Option to purchase
all the Inventory, TPR shall be entitled, for a period of time (as agreed to
by the Parties but in no event extending beyond October 28, 2015) (the
"Sell-Off Period"), but in no event beyond the Sell-Off Period, to sell and
dispose of such of the Inventory as French Connection did not elect to
purchase pursuant to the Inventory Option, on a non-exclusive basis. Such
sales shall be made only with the prior approval of French Connection and
conducted in accordance with all of the provisions of the License and this
injunction, including an accounting therefor and the payment of
Percentage Royalties thereon. Such accounting and payment shall be due
within ten (10) calendar days following the end of each month in the SellOff Period. Any items in the Inventory not sold and remaining after the
Sell-Off Period shall be delivered, disposed of or destroyed, in accordance
with French Connection's instructions, without charge to French
Connection or its Affiliates.

No later than the end of the Sell-Off Period (as defined in Section 13.4 of
the License), TPR shall promptly cause any entity formed under
Section 10.2(d) , including, without limitation, French Connection Beauty
Corp., to cease all operations and cease using the "French Connection"
and/or "FCUK" names.

Subject to the other provisions of the Court's Order, TPR shall not deliver
products to any distributor unless it has first provided to French
Connection a copy of the contract with said distributor that includes the

19

specific contract restrictions required in Sections 2.5(c) and 7.2(a) of the

License.
8.

Pre-judgment interest as permitted by law.

9.

Suclt other and further relief as the Court shall deemjust and proper.

Dated: New York, New York

Respectfully submitted,

October 9 2015
BAKER & McKENZfE LLP

David Xasloi
452 Fifth Avenue

New York, NY 10018

Attorneys for Plaintiff

French Connection Limited

20