Dov Charney, the ousted founder of American Apparel Inc., is starting anew in Los Angeles. With American Apparel fully out of his control, Charney has landed a $10 million investment to launch his new venture and by the sound of things, business is already underway. As Fortune noted in September, “as of now, the new brand is selling exclusively to other apparel companies, though Charney says he plans to sell to consumers ‘soon.’” That brand’s name? Los Angeles Apparel Company.
The name is an interesting one, given its very minimal but still somewhat pointed similarity to Charney’s first venture, American Apparel. Charney’s chosen moniker this time around is especially interesting, as it will almost certainly present some significant battles when Charney applies for federal trademark rights. Why? Well, because the “Los Angeles Apparel Company” mark is descriptive, that’s why.
For the uninitiated, trademarks have varying levels of distinctiveness that receive different treatment in terms of legal protection. Descriptive marks, for instance, describe the products with which they are associated and are not inherently distinctive. As such, a descriptive mark is only protectable when it has gained secondary meaning amongst consumers, meaning that consumers recognize and associate the mark with the brand’s goods.
A prime example of a descriptive mark? Los Angeles Apparel Company – a brand name that refers to an apparel company that is either based in Los Angeles or manufactured in Los Angeles. As previously noted, even if a mark is merely descriptive, it may acquire distinctiveness through consumer recognition (so-called "secondary meaning"). A brand may show that its mark has acquired distinctiveness by presenting evidence of the length, manner and exclusivity of the trademark's use; advertising expenditures; sales numbers; market share; and customer surveys.
Given that Charney’s new company name has a very specific geographic element, which is what makes it descriptive in the first place – additional considerations come into play. The Lanham Act – the federal statute that governs trademark law – and the U.S. Trademark Trial and Appeal Board (“TTAB”) – a body within the U.S. Patent and Trademark Office (“USPTO”) responsible for hearing and deciding certain kinds of trademark cases, including appeals – have very specific rules that govern geographic marks.
According to the Lanham Act, no trademark will be registered if it “[c]onsists of a mark which ... when used on or in connection with the goods of the applicant is primarily geographically descriptive of them.” (§ 2(e)(2), 15 U.S.C. §1052). Marks that are primarily geographically descriptive may only be registered upon a showing of a secondary meaning.
So, what is a geographically descriptive mark? The TTAB – by way of its own case law – has created a three-part test for determining whether or not a mark is “primarily geographically descriptive.” The mark will fall into that category if:
(1) The primary significance of the mark is a generally known geographic location;
(2) The goods or services originate in the place identified in the mark, and
(3) Purchasers would be likely to believe that the goods or services originate in the geographic place identified in the mark.
As you can tell, Charney’s Los Angeles Apparel Company fits quite neatly within this framework, and therefore, without a showing of secondary meaning (which will likely be difficult to establish as this point because the company is still brand new), will not be subject to registration with the USPTO.
While the Los Angeles Apparel Company mark will certainly be deemed to be descriptive, there is some good news for Charney: He has faced similar trademark issues in the past, and come out on top. The “American Apparel” trademark was initially deemed by the USPTO to be descriptive. At first, that trademark application for registration was rejected for being geographically descriptive but was eventually approved after Charney could show that the term had acquired a distinctive meaning (aka secondary meaning), helped, I’m sure, by the company’s wildly provocative and much-talked about ad campaigns.
In order to achieve federal-level trademark protections for his new brand, Charney will have to find a way to get consumers to connect Los Angeles Apparel Company goods with the brand itself, which is, of course, no easy feat. Stay tuned.