Rainbow Apparel Distributor center Corp v. Gaze U.S.A.

Extra Credit

Rainbow Apparel Distributor center Corp v. Gaze U.S.A. Inc et al is a cases presented before the judge. Rainbow apparel distribution center Corp et al are the plaintiffs while Gaze U.S.A et al are the defendants. This case is based on trademark dispute and damages as well as a breach of contract.  This case is related to that of Burger King Corp v. Rudzewicz. In business, there are trade laws that ensure that business is run fairly. All stakeholders involved should act according to the law. This will ensure fair operation of trading and not infringe on any party’s rights. In this project, the case of rainbow apparel distribution center Corp v. Gaze U.S.A will be analyzed and relate it to the case of Burger King Corp v. Rudzewicz.


Rainbow Apparel Distribution Center Corp and New 5-7-9 and Beyond, Inc who are the plaintiffs in this case are working together in their business. Their business affiliation is organized under New Jersey and New York law. Their principle business is operating in New York. The companies distribute and advertise and supply garments to retailers.

The defendant Gaze is a corporation situated in California. This corporation has an address in Loss Angeles. It engages in importing garments and sells them to apparel distributors. This company also distributes to the plaintiffs. Gaze complies with the claims brought forward by the apparel buyers. It admits jurisdiction in New York. Hong is the President of Gaze and resides in California. Hong is a sole shareholder of Gaze and travels to New York three times a year since 2011. He goes to meets clients and plaintiffs. Hong is in charge of executing contracts on behalf of Gaze.

Plaintiffs accuse Hong of involving in commercial activities with Gaze. Plaintiffs normally purchase garments from defendant and the orders are authorized by Hong. The plaintiffs claim that gaze shipped the garments to plaintiffs and was guided minimum maintained Markup Agreement.  Among the apparel that was shipped by gaze had a name URVANA. This is mark that is owned by Hong in his name. In this case, the matter that arises is plaintiffs are selling garments having a trademark URVANA. Gaze had terminated a contractual relationship with the owners of this trademark in August or September 2012. Hong argues that Gaze import apparel bearing the name under oral license with Hong. The apparel that the plaintiffs are supposed to sell with the name URVANA must only come from Gaze. Hong argues that Gaze had stopped selling apparel with the name URVANA to the plaintiffs. Thereafter, the plaintiffs bought goods with this name therefore infringing his trademark. Upon knowing this was happening, Hong sent a cease letter to plaintiffs on June 23, 2013.

Plaintiffs claim that Gaze had a breach of contract for $545,000 with reference to Markup Agreement.  According to this agreement between Gaze and Rainbow, the plaintiffs are guaranteed at least 50 percent mark upon goods shipped by Gaze. Gaze is supposed to give a discount to Rainbow in case they are unable to sell goods at the target mark up price. Rainbow argues that Gaze owes them reimbursement for markdowns. This case is related to Burger King Corp v. Rudzewicz.

Rudzewicz and Mashara have a franchise agreement with Burger. They want to open a restaurant in Michigan. The contractual agreement allowed Rudzewicz to use Burger Kings trademarks and service marks for 20 years in Michigan. All the finances obligations that were owed to Burger were sent to Florida and the defendant was trained in Florida. Upon the start of business, there were decreased sales that caused Rudzewicz not to meet the obligations as agreed. Burger sued Rudzewicz in Southern District of Florida. The defendant moved to the court to dismiss this claim. The defendant argued that the court did not have personal jurisdiction over them. The court ruled in favor of Burger and the defendant appealed.

In these two cases, there is a breach of contract. In doing business, there is need for contractual agreements. These contractual agreements are there in the case. The parties breach the contract and fail to act according to the terms of agreement. Parties should agree to terms of the contract and the law.  In both cases, the idea of personal jurisdiction arises.  In Rainbow and Gaze Case, Hong is subject to personal jurisdiction. The defendant’s motions to dismiss are denied.  The court rules against Hong personal jurisdiction. The idea of contractual agreement is essential in trading. Each party should understand the content of the agreement before signing it. These cases are relevant to lessons leant in class (Brookman, 53).

Trade transaction is content learnt in class this semester. This involves willing buyer and willing seller. For transaction to take place there are stages that the buyers and sellers have to undertake. There is need for enquiry, quotation, acceptance, acknowledgement and status enquiry, execution of enquiry, invoicing and collection of payments. There is also a stage where complaints can be raised after the buyer compares the goods with order. In case the client is not satisfied, the seller is informed. This is the same thing that happens in these cases. The companies are engaging in a transaction that requires a process. This is the reason they engage in a contractual agreement. In case the transaction does not work, the law can intervene and the agreement terminated (Brooman, 53).


Works cited

Brookman, Adam. Trademark Law: Protection, Enforcement, and Licensing. New York: Aspen

Publishers. 2000. Print.

295 F.R.D, 18 United States District Courst E.D. New York. Rainbow Apparel Distribution

Center Corp et al v. Gaze U.S.A, Inc et al. No. 13-CV-3640, Oct.30,2013