In EBIN N.Y., Inc. v. SIC Enter., Inc., No. 19-CV-1017 (PKC) (TAM) (E.D.N.Y. Sept. 23, 2022), the plaintiff alleged that the defendant sold a hair product with packaging closely resembling the trade dress of plaintiff’s own product. In the course of discovery, the defendant filed a sanctions motion, alleging that the plaintiff failed to preserve various communications relevant to the products and claims at issue.

The court held that the duty preserve evidence arose in 2017 when litigation became “reasonably foreseeable” because that is when the plaintiff first talked with an attorney about potential trade dress claims against the defendant. The plaintiff did not adopt a litigation hold until February of 2019, when it sent a “cease and desist” letter in advance of filing suit. In other cases, some courts have applied a more lenient standard, not finding a duty to preserve until litigation is “reasonably anticipated” or “likely.”

Although holding that there had been a dereliction of the duty to preserve various messages, the EBIN court declined to issue sanctions or award attorneys’ fees against the plaintiff because the court found no intent to deprive the defendant of evidence and insufficient evidence of prejudice to warrant sanctions.

More information on the case, and my brief “expert commentary,” can be found in the Exterro case law alert.