A licensing deal between fashion designer Nanette Lepore and Bluestar Alliance LLC ("Bluestar") has gone south according to a newly filed lawsuit. The New York-based designer, whose ready-to-wear collections have garnered fans ranging from Michelle Obama to Taylor Swift, has filed suit against Bluestar and NL Brand Holdings in the U.S. District Court for the Southern District of New York, a federal court in Manhattan, accusing the parties of trademark infringement and breach of contract.
Bluestar – a brand management firm that markets and manages a portfolio of brands, such as Michael Bastian and Catherine Malandrino – struck a deal with Lepore when she was looking to expand her brand in 2014. Under the proposed deal, Lepore and her husband/business partner, Robert Savage, created NL Brand Holdings, a holding company with the “exclusive, royalty-free, irrevocable and perpetual license” to use the Nanette Lepore brand in connection with Lepore’s already existing high-end fashion line. (More about licensing - the practice of contracting with another party to obtain and use rights intellectual property rights in exchange for an agreed payment - here).
Lepore and Savage agreed to take a 20 percent ownership stake in NL Brand Holdings, while Bluestar would maintain an 80 percent interest and manage the day-to-day operations. She claims in the suit that she made it very clear during negotiations with Bluestar that it was imperative that she remain involved in shaping the creative direction of her brands and in all major decisions affecting the Nanette Lepore brand family. As a result, the parties agreed that Lepore would serve as the creative director for NL Brand Holdings to maintain the “unique vision and high quality standards” of Nanette Lepore brands. Things started unravel shortly thereafter; as Lepore claims in her lawsuit, “the ink on the agreements comprising the deal had not even dried when Bluestar began showing its true colors.”
According to Lepore’s complaint, NL Brand Holdings fired Lepore “without cause” from her position as creative director on the heels of New York Fashion Week in September. Lepore claims that that her termination was associated with an in-store event that coincided with her Spring/Summer 2017 New York Fashion Week show. Lepore held an event in which she featured artwork from a new artist, who created garments for the event. Lepore speculates in her complaint that Bluestar used the event as pretext for the termination of her services, alleging that it constituted a “willful and material breach of the consulting agreement.” Bluestar then refused to pay her a previously agreed upon “substantial severance” when it terminated her contract due to its counter-argument that she was the one who breached the contract.
To bolster her argument against Bluestar, Lepore’s complaint further states that “Bluestar’s unethical and improper conduct also extends to its dealings with NL Brand Holdings’ licenses, retailers and consumers.” Bluestar allegedly encouraged certain licensees to manufacture “foreign made, inferior and defective products bearing Nanette Lepore [trademarks].” Lepore claims that she has since received numerous complaints about Bluestar’s “shoddy” products bearing her name that quickly fell apart or in some cases even posed health risks to consumers. “Indeed, adding insult to injury, despite firing Lepore as Creative Director, Bluestar continues to represent to licensees and others that Lepore approves and endorses NL Brand Holdings’ licensees’ shoddy, defective and inferior products, when in fact she does not.”
In case that’s not enough, Lepore’s complaint goes on to state that NL Brand Holdings even sent her a demand for payment of monies “allegedly owed to Brand Holdings for sales of Lepore’s high end merchandise to discount retailers that purportedly exceeded a certain threshold.” Lepore claims this was nothing more than NL Brand Holdings attempting to deprive her of her benefits of the exclusive license agreement by allowing the licensees to use her licensed marks unexclusively and therefore are in violation of the exclusivity provisions in the agreement.
Lepore is seeking punitive damages, attorney’s fees and upwards of $735,000 in damages for the alleged trademark infringement and breach of contract.