Notorious trademark enforcer adidas is currently embroiled in a dispute with streetwear apparel brand LPD New York (“LPD”) – this time, as the defendant. In a complaint filed in the U.S. District Court for the Eastern District of New York in November of 2015, LPD – which is best known for its designer jersey series (think: Margiela 57, Miuccia 49, Slimane 68, Tisci 74, etc.) alleges that adidas America and adidas AG (collectively, “adidas”) are on the hook for breach of contract, defamation, and unjust enrichment in connection with a proposed collaboration between the two.
In its complaint, LPD argues that adidas authorized it “to use certain adidas trademarks without restriction” for a collaboration, only to later claim the collaboration was illegitimate and accuse LPD of infringing adidas’ trademarks. Furthermore, LPD holds adidas accountable for failing to fund and manufacture pieces for the two capsule collections, as well as failing to co-market, co-promote, co-sell them. LPD has sought over $50,000,000 in damages.
Some backstory: The complaint states that in 2013, adidas first contacted LPD via email to express plans for “a ‘retro remix’ for five NCAA Basketball Teams…[adidas] hoped that LPD could design ‘5 unique styles for some of the most storied basketball teams’ and a ‘street-to-court campaign.’” LPD created proposals for two collections, including a “Classics Capsule” and an athletic/street crossover “Collaboration Capsule.” Per the complaint, the two brands continued collaborating across several months, and discussing terms for branding, sales, launch date, and samples.
LPD claims that in July 2014, adidas wrote in an email that they were “a full go for this collaboration!” and LPD began to manufacture and widely promote the collections beginning in September of that year.
This is where things began to go south. In November, V Magazine, which published (and ultimately pulled) an exclusive story on the Collaboration Capsule, “contacted LPD to advise that an adidas representative claimed during a telephone call that the LPD/adidas collaboration was ‘illegitimate’ – essentially claiming that LPD was advertising, manufacturing, and selling fake adidas apparel.”
To date, adidas has not publically acknowledged the collection, and while LPD did ultimately sell some of the merchandise, questions about its legitimacy spread. After the fact, in 2015, adidas proposed “that LPD sign a back-dated licensing agreement” to grant the company the right to the use adidas’ 3-stripe trademark. In accordance with that agreement, LPD would be required to pay adidas a 10% royalty on all sales.
LPD refused to sign the agreement, and ultimately filed the present suit to resolve the “substantial and continuing controversy” with adidas.
Now What?
So where is the case today? In March, the court granted in part and denied in part adidas’ motions to dismiss for failure to state a claim, effectively dismissing the majority of the case (finding that the two brands were not, in fact, bound by a formal agreement). The court also denied LPD’s motion for partial summary judgment, but has granted LPD the ability to amend their complaint.
Then, early last week week, LPD filed a Motion for Reconsideration, a vehicle by which a party can correct errors of law or fact, or present newly discovered evidence following a decision from the court. Unlike an appeal, which would go before an appellate court, motions for reconsideration are heard in front of the same judge who made the decision at issue – though both are methods for seeking to reverse a court’s decision. When successful, such motions allow a party to revisit their case and reargue theories previously advanced and rejected.
This is not likely to be a successful avenue for LPD, however. It is generally accepted that unless the court has misapprehended some material fact or point of law, motions for reconsideration will not be granted.
* The case is LPD NEW YORK, LLC v. ADIDAS AMERICA, INC. and ADIDAS AG, Civil Action No. 1:15-cv-06360 (EDNY).
Nicole Malick is a student at the University of Pennsylvania Law School.
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