From Coco Chanel to Zac Posen, many fashion designers' personal names (and personalities) have become synonymous with the fashion houses they represent. Anything associated with a famous designer's name often becomes more coveted due to the reputation, history, and recognition that the designer carefully built around it over time. As a result, designers' personal name trademarks often become their most valuable assets.
The somewhat famous Joseph Abboud case illustrates some of the issues associated with selling, assigning, or licensing all of a designer's names and trademarks to someone else, and designers should take note of its implications.
The Joseph Abboud Case
In 1987, designer Joseph Abboud launched his first menswear line and registered his personal name trademark, "Joseph Abboud," with the U.S. Patent and Trademark office. In 1988, Abboud and GFT International Corp. entered into a joint venture to create JA Apparel Corp., a company that would manufacture, market, and sell apparel under the Joseph Abboud brand name. In 2000, Joseph Abboud sold all of his rights and interests in his "Joseph Abboud" names and trademarks to JA Apparel for $65 million, and Abboud also agreed to a non-compete agreement that was to last until July 2007.
However, in 2007, a dispute arose between JA Apparel and Joseph Abboud because Abboud started a new menswear line prior to July 2007 called "jaz," using his name to promote the new line with ads that described jaz as "a new composition by designer Joseph Abboud." JA Apparel sued Joseph Abboud for, among other things, trademark infringement, arguing that Mr. Abboud could not continue to use his personal name to promote or sell fashion goods, since he had sold "all of [his] right, title and interest in . . . [t]he names, trademarks, trade names, service marks, logos, insignias and designations . . . ." to JA Apparel in 2000.
In JA Apparel Corp. v. Joseph Abboud, No. 07 Civ. 7787 (THK), 2008 WL 2329533 (S.D.N.Y. June 5, 2008), the Court held that Joseph Abboud could no longer use his name for commercial purposes since he sold JA Apparel the exclusive right to use the "Joseph Abboud" name in connection with commercial goods and services.
The Court reasoned that Abboud lost his right to use his name commercially since in the parties' agreement, he sold all of his rights and interests in his trademarks and "names" to JA Apparel, as well as his rights to use and apply for trademark registrations for new trademarks or designations containing the words "Joseph Abboud," or anything similar to or derivative of his name.
Therefore, Mr. Abboud's use of his name constituted trademark infringement. The Court permanently enjoined Mr. Abboud from using his personal name in association with any commercial goods, products, or services, with a narrow exception for personal and public appearances unrelated to the promotion or sale of goods and services.
Designers should be well aware of the harsh outcome of the Abboud case before attempting to assign, license, or sell away all of their trademarks and names. No matter how lucrative the offer, the resulting inability to use one's personal name in connection with the promotion or sale of goods can be extremely limiting for a designer, as the Abboud case illustrates.
* Courtesy of Sheppard Mullin Richter & Hampton LLP.