Image: New Balance

Almost two months after filing suit against New Balance for allegedly hijacking its Vision Streetwear brand’s trademark for a collaboration collection with Jaden Smith, ABG Collective has filed an amended complaint, dropping the counterfeiting claim that it originally lodged against the Boston, Massachusetts-based sportswear company, but keeping its federal trademark infringement and false designation of origin claims, as well as its common law trademark dilution and unfair competition causes of action, among others, in tact.

The amended complaint that ABG Collective (“ABG”) – a holding company of Barneys, Brooks Brothers, Aeropostale, and Forever 21 owner Authentic Brands Group – filed on December 18 closely mirrors its original October 26 filing, save for some added language identifying New Balance’s sneakers as the result of a Jaden Smith collab, which ABG did not specifically mention the first time around (Smith is not a party to the suit), and the absence of the previously-asserted federal counterfeiting claim. In its original complaint, ABG argued that New Balance “used in commerce spurious marks that are counterfeits of, identical to, and substantially indistinguishable from, [ABG’s] VISION trademark … in connection with goods identical to goods identified in [its] trademark registration, namely, footwear,” thereby, allegedly giving rise to counterfeiting liability.

ABG originally alleged that New Balance used the VISION trademark “knowing that [the mark was] a counterfeit in connection with the promotion and/or sale of goods identical to the goods of [the ABG-owned Vision Streetwear] without the consent or authorization of [ABG], in a manner likely to cause confusion, to cause mistake, or to deceive as to source or origin among consumers.” Since ABG maintains a federal registration for the “VISION” trademark for use on footwear, it argued that New Balance’s use of the word “VISION” on various parts of the Jaden Smith sneakers, including on the sole, the tongue tab, and in small print on side of the sneakers, not only resulted in trademark infringement, but met the higher bar required for counterfeiting. 

While ABG’s trademark infringement claim appears to be straightforward enough, its counterfeiting claim has raised eyebrows from the outset given that the facts in the case at hand depart from the norm when it comes to what examples of counterfeiting usually look like; counterfeiters commonly copy the entirely of the product at play – whether that be a Gucci handbag or a pair of coveted Nike sneakers, for instance – and not just the source-identifying brand name and/or logos that appear on that product. Or as Finnegan partner Mark Sommers put it, “In the typical case of trademark counterfeiting, a product is made to imitate all facets of the genuine product, including its trademark, so that purchasers are deceived into buying what they believe is a genuinely branded good.”

With that in mind, Sommers says that it is not uncommon for “the typical case of trademark counterfeiting [to] also involve patent and copyright infringement” in connection with the replication of the design of the underlying product. 

That is not exactly what happened here, though, as New Balance is selling a sneaker that is distinct – in terms of design – from the footwear being offered up by VISION Streetwear. In fact, New Balance’s “Vision” racer, complete with a markedly chunky sole, and a mashup of elements from its “casual X-Racer and the 1700 walking shoes,” looks nothing like the skinny, vulcanized-sole, skate-centric sneakers that VISION Streetwear is best known for making. 

About a month after ABG filed its complaint, counsel for New Balance alerted the court that it was planning to file a motion to dismiss the counterfeiting claim, arguing that “this is an ordinary trademark dispute between two established market participants,” and that the facts alleged by ABG in its complaint simply “cannot support a claim of counterfeiting.” 

Pointing to “uniform hold[ings]” from courts in the U.S. Court of Appeals for the Second Circuit, New Balance’s counsel asserted in a November 20 letter addressed to Judge Koeltl of the U.S. District Court for the Southern District of New York that “counterfeiting occurs only when there is ‘a closer degree of similarity than is required for traditional trademark infringement,’” and that such a claim involves “more than a mere similarity or a ‘colorable imitation’ of a registered mark,” which is the standard for trademark infringement, and instead, “near identity is required.” 

Citing the U.S. District Court for the Southern District of New York’s 2012 decision in the Gucci America v. Guess? case, New Balance claimed that “[t]he essence of counterfeiting is that the use of the infringing mark ‘seeks to trick the consumer into believing he or she is getting the genuine article, rather than a colorable imitation.’” 

And such an assessment cannot be done in a vacuum, New Balance argued, noting that “the alleged counterfeit mark must be compared with the registered mark as it appears on actual merchandise to an average purchaser,” with the Second Circuit having dismissed counterfeiting claims in the past when a “‘cursory visual inspection’ revealed differences in font, color, and capitalization” of the mark, and in other instances “based on side-by-side images of the two products.”  

Looking beyond the lack of similarity between the two parties’ sneakers, and speaking of the “VISION” trademarks, themselves, New Balance asserted that even the depictions of those are different. “Under no circumstances under the facts alleged could anyone conclude that New Balance used the ‘((Vision))’ and ‘Vision Racer’ designations to trick consumers into believing that they were buying Vision Streetwear products.” More than that, given New Balance’s “prominent use of the famous New Balance marks,” including its stylized “N” mark, on the allegedly infringing sneakers, such a “conclusion would be nonsensical,” the company’s counsel contended. 

“Given these differences, it is unsurprising that ABG failed to plead any facts that could credibly show that New Balance’s use of ‘((Vision))’ is ‘identical’ to or ‘substantially indistinguishable’ from ABG’s marks, particularly when considered in their marketplace contexts,” (i.e., on the shoes, themselves). “Indeed, the only similarity alleged is the common use of the word ‘Vision,’ which is insufficient.” 

With the foregoing in mind, New Balance requested that the Court schedule a pre-motion conference to discuss New Balance’s anticipated motion. 

Fast forward to December 18 and on the heels of the parties’ conference ABG filed an amended complaint, dropping its counterfeiting claim, and keep in place its federal and common law trademark claims. ABG has until January 5 to respond. 

*The case is ABG Collective LLC v. New Balance Athletics Inc., 1:20-cv-08931 (SDNY).