Case 1:16-cv-02739-PGG Document 8 Filed 04/13/16 Page 1 of 11

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
________________________________________
Charisma World Wide Corp., S.A.,
)
a Panamanian Corporation,
)
)
)
Plaintiff,
)
)
v.
)
)
)
Avon Products Inc.,
)
a New York Corporation,
)
)
)
Defendant.
)
________________________________________ )

Index No.__________

COMPLAINT

Jury Trial Demanded

FILED VIA ECF

Plaintiff, Charisma World Wide Corp., S.A. (Charisma World Wide), sues Defendant,
Avon Products Inc. (Avon USA), based upon actual knowledge as to itself and its own actions,
and based upon information and belief as to all other persons and events, as follows:
NATURE OF THE CASE
1.

This action seeks a judgment for compensatory and punitive damages in favor of

Plaintiff, Charisma World Wide, and against Defendant, Avon USA, under extraterritorial
application of the Lanham Act, for trademark infringement and unfair competition committed by
Avon USA, both directly and with the aid of its wholly owned subsidiary Productos Avon, S.A.
(Avon Subsidiary), over which, upon information and belief, Avon USA has complete control.
2.

For reasons that will become readily apparent and significant below, Charisma

World Wide was deprived of: 1) its goodwill; 2) its ability to manufacture and distribute its
products and otherwise utilize its trademark; and 3) previously available private label contracts
and opportunities in the Caribbean, Latin America, and the United States.

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3.

In an effort to gain a competitive advantage over its U.S. and foreign competitors,

Avon USA made a strategic and intentional attack on family-owned Charisma World Wide,
marketing products with a mark infringing on Plaintiffs mark, to the detriment of Plaintiff.
4.

All conditions precedent to the bringing of this action have occurred, been

performed, or been excused.

JURISDICTION AND VENUE
5.

This action arises under the Lanham Act, 15 U.S.C. 1051 et seq. Jurisdiction is

therefore proper under 28 U.S.C. 1331.

6.

Jurisdiction is also proper under 28 U.S.C. 1332, because the matter in

controversy grossly exceeds seventy five thousand dollars ($75,000.00), exclusive of interest and
costs; Plaintiff is a citizen of the Republic of Panama (Panama); and Defendant is a citizen of
New York State.
7.

Venue is proper in the Southern District of New York pursuant to 28 U.S.C.

1391(b)(d), because Avon USA directed the actions and violations complained of herein from
its global headquarters, which is located in this District. Venue is further proper, because the
witnesses and facts necessary to maintain Plaintiffs claims are located within this District.
8.

Charisma World Wide is entitled to the relief requested herein under the Lanham

Act pursuant to 15 U.S.C. 1126(b) and -(h), because both parties domiciles are signatories to:
(1) the Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, as revised at
Stockholm, July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305; and (2) the General InterAmerican Convention for Trade Mark and Commercial Protection, Feb. 20, 1929, 46 Stat. 2907.

Case 1:16-cv-02739-PGG Document 8 Filed 04/13/16 Page 3 of 11

PARTIES
Plaintiff
9.

Plaintiff, Charisma World Wide, is a Panamanian corporation having its principal

place of business in Panama City, Panama.

Defendant
10.

Defendant, Avon USA, is a New York corporation having its global headquarters

at 777 Third Avenue, New York, NY 10017.

11.

Avon USA is an international manufacturer characterized as a direct selling

company specializing in the beauty, household, and personal care markets with annual sales that
are regularly in excess of several billion dollars worldwide.
12.

Avon USAs direct selling business model involves the use of door-to-door

sales representatives, commonly referred to as Avon ladies, who advertise and sell its products
directly to potential and realized customers and/or purchasers. Upon information and belief,
Avon USA maintains and operates training centers for potential representatives the world over.
13.

Avon USA, a leviathan in the womens personal care product industry, the fifth-

largest beauty company and second-largest direct selling enterprise in the world, with millions of
representatives worldwide, arguably has only a few true competitors, specifically, global
womens retail titans LOreal, S.A., Mary Kay, Inc., and Revlon, Inc.
FACTS
14.

This action arises in the context of the womens cosmetics and personal care

industry, generally, and, more particularly, the market for perfume and perfumed body products
sold to Panamanian women.

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15.

On or about October 15, 1990, Charisma World Wide, a family-owned business,

created and registered in Panama the trademark Charisma y Diseo 1 (Charisma Mark and/or
Mark), Certificate of Registry No. 40738 01, with the National Board of Commerce in the
Ministry of Commerce and Industries of Panama. A true and correct copy of the Charisma
Marks official registration is attached hereto as Exhibit A.
16.

Subsequently, Charisma World Wide designed, manufactured, and distributed a

wide variety of womens products bearing the Charisma Mark, including, among others, hand
and body lotions, roll-on antiperspirant deodorants, perfumed body talc, and perfumed dusting
powders (Charisma Products).
17.

Charisma Products bearing the Charisma Mark were distributed by Charisma

Worldwide through wholesale supermarkets, pharmacies, department stores, and other large
distribution centers throughout Panama.
18.

Upon information and belief, Charisma Products bearing the Charisma Mark were

frequently consumed by individuals of Panamanian extraction residing, either temporarily or

permanently, within the United States.
19.

The Charisma Mark earned a reputation for quality amongst Panamanians

throughout the world. This reputation reflected onto Charisma Products, which also enjoyed a
significant and respectable reputation in the worldwide Panamanian community.
20.

Additionally, the commercial and financial success of the Charisma Products

afforded Charisma World Wide the opportunity to engage in substantial and financially lucrative

Charisma and Design, as translated in English.

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private label 2 opportunities and contracts for its Charisma Products in the Caribbean, Latin
America, and the United States.
21.

Between the years of 1990 and 2006, Charisma World Wide was able to generate,

sustain, and grow its enterprise into a respectable and recognizable brand and operation that
generated more than three million dollars ($3,000,000.00) annually in connection with the
Charisma Mark alone, in the years prior to 2006.
Avon USA Attempts To Disrupt Charisma World Wide
22.

On October 22, 1991, Avon Subsidiary, a wholly owned subsidiary of Defendant

Avon USA, was incorporated in Panama (hereinafter Avon Subsidiary and Avon USA shall
sometimes be collectively referred to as the Avon Companies).
23.

Upon information and belief, sometime after Avon Subsidiarys inception, and

under the direction, instruction, and authorization of Avon USA, the Avon Companies began
holding themselves out as the owners of the mark Charisma in Panama and using an infringing
mark (the Avon Infringing Mark) to market, distribute, and sell their own beauty, cosmetic,
and personal care products to Panamanians (the Panamanian Avon Products).
24.

Avon USA utilized its business model of direct selling to market its infringing

products directly to Panamanian consumers while bypassing public marketing and advertising.
By concealing its conduct in a series of private transactions, Avon USA concealed its infringing
activity from Plaintiff.
25.

On or about August 7, 2006, Avon USA initiated a sham legal proceeding against

Charisma World Wide in Panamas Ninth Circuit Court, Civil Branch of the First Judicial

The term private label describes a special business arrangement pursuant to which a
manufacturer or producers product is sold under the name of a retailer or wholesaler. See, e.g.,
Cadbury Beverages, Inc. v. Cott Corp., 73 F.3d 474, 476 (2d Cir. 1996).
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District of Panama. Avon USA purportedly soughtwithout basisto cancel and nullify
Charisma World Wides Charisma Mark (Panamanian Litigation).
26.

Before Avon USA initiated the Panamanian Litigation, Charisma World Wide

was unaware of Avon USAs calculated and unlawful infringement of the Charisma Mark.
However, after the inception of the Panamanian Litigation, and throughout the seven-year-long
legal battle initiated by Avon USA, the Avon Companies deliberately intensified their infringing
activity by blatantly and openly marketing the Panamanian Avon Products using the Avon
Infringing Mark.
27.

Additionally, the Panamanian Litigation prevented, and prejudicially delayed,

Plaintiff from being able to renew the Charisma Mark with the Panamanian Ministry of
Commerce, while also negatively impacting consumer confidence and goodwill in connection
with the Charisma Products and the Charisma Mark. As a result, Charisma World Wide was
unable to market, distribute, or otherwise continue the manufacture, sale and distribution of its
Charisma Products.
28.

The loss of revenue resulting from the Avon Companies infringement also

diminished Charisma World Wides ability to continue producing and licensing its private label
products.
29.

Ultimately, the Panamanian Litigation was resolved on April 16, 2013, by the

Third Superior Court of Justice of the First Judicial Circuit of Panama, in favor of Charisma
World Wide. A true and correct copy of the final appellate judgment and opinion is attached
hereto and marked as Exhibit B.
30.

Not surprisingly, and notwithstanding that Charisma World Wide was adjudicated

as the rightful holder of the Charisma Mark in Panama, the Avon Companies continued to
unlawfully use the Avon Infringing Mark to market, distribute, and sell the Panamanian Avon
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Products. Upon information and belief, the Avon Companies have expanded their infringing
retail efforts to openly include at least six retail locations in Panama. Also upon information and
belief, these infringing retail efforts have caused United States-based consumers to purchase the
Panamanian Avon Products.
31.

Upon information and belief, as of the date of this filing: 1) the Avon Companies

utilize the Avon Infringing Mark on the Panamanian Avon Products in catalogues and other
marketing materials, and 2) the Avon Companies use large retail outlets to offer their
Panamanian Avon Products under the Avon Infringing Mark. A true and correct copy of pictures
documenting these infringements are attached hereto and marked as Exhibit C.
32.

To be sure, Plaintiff was able to recently purchase Panamanian Avon Products

bearing the Avon Infringing Mark. A true and correct copy of the retail transaction evidencing
Defendants unlawful activity is attached hereto and marked as Exhibit D.
33.

Avon USAs unlawful infringement and activities as outlined herein are

demonstrative of, and in-line with, a pattern, practice, and history of taking advantage of
developing countries with an end toward exploiting their markets for its own profit and financial
gain. 3

In December 2014, Avon USA formally settled a U.S. Department of Justice and
Securities and Exchange Commission criminal and civil action, and investigation, that required
further internal investigations as to Avon USA and its subsidiaries corrupt business practices in
Latin America and other developing regions. See Press Release, U.S. Department of Justice,
Avon Products Inc. and Avon Products (China) Co. Ltd. Will Pay More than $135 Million in
Criminal
and
Regulatory
Penalties
(Dec.
17,
2014),
available
at
https://www.justice.gov/opa/pr/avon-china-pleads-guilty-violating-fcpa-concealing-more-8million-gifts-chinese-officials; Tom Schoenberg & David Voreacos, Avon Bribe-Probe Tab
Neared $500 Million as Sales Slumped, Bloomberg (May 2, 2014, 5:08 PM),
http://www.bloomberg.com/news/articles/2014-05-02/avon-bribe-probe-tab-neared-500-millionas-sales-slumped (noting that Avon USAs 2014 agreement with the federal government over
unlawful conduct in China would cover similar misconduct in Latin America).
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34.

Upon information and belief, Avon USA made the following decisions from its

global headquarters in New York that had significant effects on both U.S. and Panamanian
commerce: 1) to sell its Panamanian Avon Products using a Charisma mark that it knew
infringed upon the Charisma Mark; 2) to do so using Avon USAs tried and true method of
direct selling so as to not draw the attention of Charisma World Wide; 3) to do so by directing,
instructing, and ordering Avon Subsidiary, as a mere instrumentality, to carry out its plan to
unlawfully violate Plaintiffs intellectual property rights; and 4) to carry out the Panamanian
Litigation to further its scheme.
35.

Upon information and belief, Avon USA gained a pecuniary benefit from the

infringement of the Charisma Mark and the sales resulting therefrom.

36.

Upon information and belief, Avon USA utilized the increased sales it would

otherwise not have realized without the infringement to increase the perceived value of its shares
that were/are bought and sold daily by American and foreign investors who were unaware of the
infringement.
37.

Upon information and belief, as a result of the infringement, Avon USA gained an

unfair advantage over its major U.S. competitors such as Mary Kay, Inc., and Revlon, Inc., and
other key competitors around the world.
38.

Because Charisma World Wide purchased from U.S. companies nearly all of the

materials it used to manufacture and produce the Charisma Products, certain U.S. companies
including American Containers, Inc., Prochem USA, and Bourbon Street Trading Co.all lost
lucrative contracts and further business opportunities with Charisma World Wide, as a result of
Defendants infringement.
39.

As a result of the infringement, Charisma World Wides private label contracts in

the Caribbean, Latin America, and the United States were limited, jeopardized or lost. This
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included private label contracts in Puerto Rico, a United States Territory, valued at
approximately four hundred thousand dollars ($400,000.00) a month.
40.

Charisma World Wide, its current and former employees, and the roughly 15,000

vendors that formerly distributed and sold the Charisma Products under the Charisma Mark have
been deprived of the pride, economic and personal benefit, and enjoyment of the Charisma
Products simply because Avon USA failed to respect any notion of intellectual property rights.
41.

It is further respectfully submitted that Avon USAs infringement and the type of

conduct it encourages, if left unaddressed, damage the very trade and commerce relationship that
the recently entered U.S.-Panama Trade Promotion Agreement was designed to foster. Avon
USAs intentional and deliberate infringement of Charisma World Wides Mark not only violates
the intellectual property laws of the United States and Panama, it also adversely affects the
growth of free trade and free market economies by stifling global competition and promoting
unfair competition.
Count I Unfair Competition
Violation of 15 U.S.C. 1125(a)
42.

Charisma World Wide repeats the allegations set forth in paragraphs 141 above

as if fully rewritten herein.

43.

Upon information and belief, at all times material hereto, Avon USA made the

deliberate and calculated decision, from within the United States, to unlawfully introduce and
infiltrate its Avon Infringing Mark in order to generate sales of its Panamanian Avon Products.
44.

Charisma World Wide is informed and believes, and based thereon alleges, that

Avon USA has created a likelihood of confusion with the Charisma Mark among consumers in
Panama, the United States, and elsewhere, to Plaintiffs detriment, thereby constituting
infringement of Plaintiffs Mark.

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45.

As a proximate result of Avon USAs unlawful conduct, Plaintiffs customers

throughout the world have come to believe that Charisma World Wide is the infringer, and that
the Charisma Mark is an inferior imitation, and have refused to continue purchasing, distributing,
or retailing the Charisma Products.
46.

As a proximate result of Avon USAs unlawful conduct, Charisma World Wide is

informed and believes, and based thereon alleges, that it has been damaged in an unascertained
amount that easily exceeds twenty million dollars ($20,000,000.00). Plaintiff might seek leave to
amend this Complaint when such damages have been fully ascertained, if necessary.
47.

At all times material hereto, Avon USA acted in bad faith, oppressively, and

maliciously toward Charisma World Wide, with intent to injure Plaintiff. It is respectfully
submitted that Plaintiff is therefore entitled to treble damages against Defendant, in an
unascertained amount. Plaintiff might seek leave to amend this Complaint when such damages
have been fully ascertained, if necessary.
Prayer for Relief
WHEREFORE, Plaintiff Charisma World Wide prays for relief as follows:
a.

Enter judgment in favor of Charisma World Wide and against Avon USA, on

Charisma World Wides claim for relief;

b.

Award damages to Charisma World Wide equal to the lost profits resulting from

Defendants wrongful activity;

c.

Award damages to Charisma World Wide equal to Defendants profits from its

wrongful activity;
d.

Award Charisma World Wide its reasonable attorneys fees, punitive damages,

costs, and all other expenses incurred in maintaining this action;

e.

Enjoin Avon USA from engaging in further infringement in Panama; and

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f.

Award any further relief available under the law.

Jury Demand

Pursuant to Rule 38(b) of the Federal Rules of Civi l Procedure, Plaintiff hereby requests
a trial by jury on all issues permitted by law, with the maximum number of jurors permitted by
law.

April 12, 20 16
New York, NY
Respectfully submitted,
~'RANK LLI'

--A

4/7~

Gregory A. Frank, Esq. (GF-0207)

275 Madison A venue, Suite 705
New York, NY I 0016
212.682.1853
gfrank@frankllp. com

THE BRAVO LAW FIRM

Jason Bravo, Esq.
Florida Bar No. 085743
1717 N. Bayshore Drive, Suite 240
Miami, FL 33 132
305.335.0709
j bravo@thebravolawfirm.com

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