Facts: At its Fall/Winter 2003 womenswear fashion show held on October 2002, Louis Vuitton ("LV") introduced handbags bearing a new design. This design consisted of LV’s original, registered Toile Monogram trademark in an array of thirty-three colors (the "Murakami colors") arranged on a white or black background (collectively, the "Monogram Multicolore mark").
LV’s new design was the product of a collaboration between its designers and the Japanese artist Takashi Murakami. And it was successful. By March 2003, handbags bearing the Monogram Multicolore mark with the white background began arriving in LV’s retail stores. Handbags with the black `background were distributed for retail sale in July 2003. Due to the handbags' popularity, there were waiting lists for certain products at times during 2003 and 2004.
In 2003, Dooney & Bourke ("DB") introduced its "It Bag" line of handbags, small leather goods, and accessories. The "It Bag" line bears a design featuring the "DB" monogram set in nine colors on a white background, and the "DB" monogram printed in seven colors on a black background. The "It Bag" line does not feature any additional graphics or shapes other than the colored monograms on a white or black background.
LV sought preliminary judgment against DB, alleging federal trademark infringement, unfair competition and false designation of origin, and trademark dilution. Additionally, LV brought claims for trademark infringement, trademark dilution, and unfair competition claims under New York State law.
United States District Court for the Southern District of New York
On August 27, 2004, District Judge Shira Scheindlin ruled against LV on the trademark infringement claim because, despite the validity of the Monogram Multicolore mark, LV failed to demonstrate a likelihood of confusion "among consumers as to the source, authorization, or affiliation of DB’s handbags."
In assessing the likelihood of confusion, the district court considered the non-exclusive multi-factor Polaroid test, which includes, (1) the strength of the mark, (2) the similarity of the two marks, (3) the proximity of the products, (4) actual confusion, (5) the likelihood of plaintiff's bridging the gap, (6) defendant's good faith in adopting its mark, (7) the quality of defendant's products, and (8) the sophistication of the consumers. The court considered each factor as well as consumer surveys, ultimately finding that there had not been a showing of a likelihood of confusion.
And on the dilution claim, it was determined that though LV had demonstrated fame and inherent distinctiveness of its mark, it had failed to adequately demonstrate that it was likely to prove actual dilution.
Accordingly, the district court denied LV’s preliminary injunction.
U.S. Court of Appeals for the Second Circuit
LV appealed the district court’s decision.
On June 30, 2006, the U.S. Court of Appeals for the Second Circuit agreed with the district court that LV's Monogram Multicolore mark deserved protection, but vacated the district court's decision to utilize a side-by-side comparison to determine similarity of the marks. In assessing likelihood of confusion, Circuit Judge Richard Cardamone held “that to determine whether two products are confusingly similar it is improper to conduct a side-by-side comparison in lieu of focusing on actual market conditions and the type of confusion alleged.”
The Second Circuit also vacated the district court's decision concerning the proper burden for a preliminary injunction, but agreed with the district court that LV failed to prove trademark dilution.
The case was remanded back to the district court.
The Second Circuit established four separate holdings in this case that established (1) the proper burden for a preliminary injunction; (2) the type of trademark entitled to protection; (3) the proper test for determining the likelihood of confusion; and (4) the burden that must be met for a trademark dilution claim."
Of these four holdings, the Second Circuit focused on primarily on one of these holdings: the proper standard to determine whether the similarity between the parties' marks amounted to likelihood of confusion.
The court stated that to determine likelihood of confusion, “courts must analyze the mark's overall impression on a consumer, considering the context in which the marks are displayed and the ‘totality of factors that could cause confusion among prospective purchasers.’" The court found that the district court improperly relied on a side-by-side comparison'' to determine the similarity of LV’s and DB's trademarks, rather than using a sequential, marketplace comparison. The court remanded this issue to the district court for consideration.
It’s important to note that the Second Circuit remanded only the second of the Polaroid factors, which is the similarity of the marks. The court held that while the district court erred in determining this likelihood of confusion factor, by utilizing a side-by-side comparison," the district court had not “clearly erred with respect to the other Polaroid factors.” As a result, the Second Circuit only compelled the district court to reanalyze the similarity of LV’s and DB’s marks under the sequential, marketplace comparison, and to then rebalance all of the Polaroid factors relevant to this case. (Digital Commons)
On remand, United States District Court for the Southern District of New York
On April 27, 2007, the district court held that “in order to recover Dooney and Bourke's profits on its federal [trademark] infringement claim, Louis Vuitton must prove that Dooney and Bourke's conduct was willfully deceitful.” The court also ruled that LV could not collect monetary damages for its dilution claim unless there is an actual showing of dilution.
On May 30, 2008, the district court once again considered the case on its merits. In considering the second Polaroid factor, the district court noted that while the products bearing the marks at issue do have some similarities, there are discernable differences.
“First, Louis Vuitton's Monogram Multicolore mark consists of its well-recognized, strong, and inherently distinctive Toile Monogram mark. Dooney & Bourke's ‘It Bags’ prominently feature the ‘DB’ registered trademark.”
“Second, the undisputed evidence shows that each monogram or shape that comprises the Louis Vuitton's Monogram Multicolore mark bears a single color. For example, both the ‘L’ and the ‘V’ that comprise a single ‘LV’ monogram on a handbag are the same color. In contrast, the ‘D’ and the ‘B’ comprising a single ‘DB’ monogram on a handbag bear different colors.”
As a result, the district court granted DB’s motion for summary judgment.
Conclusion: This case offered the Second Circuit and the district court the opportunity to establish stronger trademark protections for designers. Unfortunately, neither court took this opportunity, thus leaving behind the idea that a designer may utilize a similar idea and design of another designer without fear of trademark infringement.