Briefing: September 1, 2023

Louboutin v. Amazon, Creative Director Drama at Supreme & More

In a bid to keep it somewhat brief this week and cut down on your weekend reading, there is one key case development from August worth spotlighting at a high-level (more to come): On August 21, 2023, the Regional Court of Düsseldorf held that Amazon is liable for design infringement & issued a preliminary injunction against an arm of the retail behemoth on the basis that the standards set by the Court of Justice of the European Union (“CJEU”) in a couple of Louboutin-initiated TM cases can also be applied in the Community design law context.

A Tiny Bit of Background: You will likely recall that Louboutin waged TM cases against Amazon in Belgium & Luxembourg in 2019 (Case Nos. C-148/21 & C-184/21), arguing that Amazon, as the operator of a hybrid marketplace (which hosts its own products & those of third parties), should be considered directly liable for TM infringement due to the presence of third-party listings for infringing goods on its platform. Amazon argued that it should be shielded from liability, since as the operator of an online marketplace comprised largely of third party-offered products, it does not use the TMs at issue. Louboutin disagreed, asserting that traditional online marketplaces principles are not applicable to Amazon and thus, it should be considered a distributor of the goods sold on its platforms & that the advertisements for third-party sellers are part of Amazon’s own commercial communication.

Both courts sought the guidance of the CJEU, which held late last year that an operator – like Amazon – may be directly liable for TM infringement, as a party’s unauthorized use of a TM that is identical to the mark of another “implies, at the very least, that the [party] makes use of the [mark].” Beyond that, the court stated that such use may prompt “users of the online marketplace to have the impression that the advertisements for the products in question come not from third-party sellers, but from the operator of the marketplace,” thereby, giving rise to “use” of the mark by the marketplace operator.

Back to the Community design case: The Regional Court of Düsseldorf determined that it is “clear” in the case at hand (No. 14c O 67/23) that Amazon used the design at issue – Louboutin’s red soled shoes – “within the meaning of Article 19 (1) sentence 1 CDR.” (That provision states that “a registered Community design shall confer on its holder the exclusive right to use it & to prevent any third party not having his consent from using it.”)

Addressing the potential for platform liability for “illegal third-party content in trademark and design law,” and “taking into account the principles established by the CJEU [in the earlier Louboutin cases],” the German court held that “the possibility developed by the [CJEU] of [a marketplace operator] being directly liable for an infringement if the relevant public attributes the use of the TM to the platform operator can also be transferred to design law.”

The Bigger Picture Here, according to LÖFFEL ABRAR Rechtsanwälte PartG mbB partner Oliver Löffel, is that this is very likely the first decision that applies/extends the CJEU Louboutin standards beyond the trademark context to design law.

Some Litigation Updates

– PRL v. Zoetop: PRL’s trademark infringement and unfair competition case against Shein is still underway, with the Ralph Lauren subsidiary filing a third amended complaint, which includes a trade dress claim for the Polo ID Shoulder Bag.

– Nike v. Customs by IleneNike’s supplemental brief applying the first sale doctrine in light of the U.S. Court of Appeals for the Ninth Circuit’s decision in the Bluetooth SIG Inc. lawsuit and other applicable precedent from the federal appeals court is right here. (Article to come on this soon.)

– Stussy v. Marcos Villalva: Stussy is waging a new TM infringement, unfair competition & false advertising suit, accusing Marcos Villalva and his company, Villa Co., among others, of adopting and using “substantially identical likenesses of the STUSSY marks” on their own wares. (Complaint is here.)

This Week at Supreme …

After just a year and a half, Tremaine Emory is leaving his position as creative director at VF Corp-owned streetwear giant, Supreme. In his resignation letter, Emory said he believes that “systemic racism was at play within the structure of Supreme.” Emory has since posted about his exit on Instagram, asserting, in part, that a statement from Supreme about the situation is “a lie to hide the systemic racism that lies deep within Supreme and almost all white Owned corporations.”

The announcement follows from Emory’s very recent interview with Justsmile mag, in which he asserted – in what seems, in hindsight at least, like a potentially pointed(?) statement – that he “would caution kids who care about the validation of these big conglomerates and media giants, because these conglomerates are banks. This is late-stage capitalism. These institutions will finance a designer, an artist, a band, a director, a writer, or whatever to make something to get more money than they put in.” This feels like it could be a non-disparagement situation (a la Nicolas Ghesquière, Balenciaga/Kering way back when) in the making. Stay tuned.

As for the impact on demand, on Thursday (new drop day), the Supreme store in Williamsburg, Brooklyn was the busiest I’ve seen since before the company’s summer break.

In some deal-making news in fashion/retail, tech & web3 …

– Omnichannel inventory management system provider Rewaa has raised $27M in a Series A round.

– Helsinki-based e-commerce startup Starcart has raised €3.5M in a Seed round to “lead the next wave of online shopping.”

– Alias Technologies has raised $3M in a Seed round to grow BeFake, “an AI-driven, zero-pressure social media app.”

– Generative AI text-to-image startup Ideogram has raised $16.5M in a Seed round led by a16z.

– Next has confirmed a deal to acquire Warburg Pincus’s 34% in Reiss in exchange for £128M.

– Frasers has raised its stake in fast fashion company Boohoo from 7.8% to 9.1%.

– AI-powered discovery platform Reveal has acquired both Logikcull & IPRO, two fellow eDiscovery platforms, bringing its valuation to upwards of $1B.

– EverService Holdings has acquired iLawyer Marketing, a legal-focused digital marketing solutions company.

– FirstMate, which designs & develops storefront-focused software tools for NFT creators, has raised $3.75M.

– Web3 engagement platform Raleon has raised $3.8M in a Seed round.