Lucky Brand and another fashion company have been locked into an 18 year-long legal battle that will get its day before the Supreme Court this fall. The nation’s highest court revealed late last month that it will take on the long-running case, which first pitted Marcel Fashions Group against Lucky Brand Dungarees in 2001 when the Florida-based fashion wholesaler filed suit against the denim-maker for allegedly infringing its “Get Lucky” trademark by using “Get Lucky” on its once-wildly-popular apparel.
While Marcel and Lucky Brand managed to settle that suit out of court in 2003, with Lucky Brand agreeing to stop using Marcel’s “Get Lucky” mark and Marcel releasing certain trademark-specific legal claims it might have against Lucky Brand in the future, the parties were back in court less than two years later. Lucky Brand, this time, filed suit, accusing Marcel of granting another wholesaler a license for the “Get Lucky” mark, thereby infringing its own “Lucky” marks. Marcel countersuit, asserting that Lucky Brand’s continued use of “Get Lucky” violated their 2003 settlement.
While Lucky Brand initially pointed to the terms of the 2003 settlement – including Marcel’s release of trademark-specific claims – in its motion to dismiss and its answer, it did not raise the release defense again when the case made its way before a jury, which found in favor for Marcel, deciding that Lucky Brand had, in fact, infringed its “Get Lucky” trademark. By way of a final judgment issued in 2005, the district court permanently enjoined Lucky Brand from using the “Get Lucky” mark. The court’s judgment also included language from the jury verdict form, stating that “Lucky Brand infringed Marcel Fashion’s Get Lucky trademark … by using Get Lucky, the Lucky Brand trademarks, and any other trademarks including the word ‘Lucky.’”
The peace between the two parties in the wake of the trial and the court’s judgment did not last long. In 2011, Marcel filed yet another suit, this time seeking trademark infringement relief for Lucky Brand’s use of the “Lucky Brand” mark in light of the court’s 2005 judgment.
Again, Lucky Brand did not initially raise the release defense. In fact, only on remand did it finally raise this defense in furtherance of a motion to dismiss. In response, Marcel argued that the defense should be barred by claim preclusion – the principle that a cause of action may not be relitigated once it has been judged on the merits.
The district court sided with Lucky Brand, and dismissed the case, determining that Marcel’s claims against Lucky Brand “are plainly foreclosed by the [2003] settlement agreement.” Marcel appealed the decision, and the Second Circuit Court of Appeals, ruling in Marcel’s favor, stated that claim preclusion encompasses “defense preclusion,” and thus, barred Lucky Brand’s defense based on the release since Lucky Brand had opted not to properly raise the release defense in the 2005 suit.
Fast forward to 2019, and that very case is still underway with the key issue being whether Lucky Brand – the defendant – can be barred from raising a defense – one centering on the release agreement – that was not litigated and resolved in prior cases between the parties. The Supreme Court will review the case this fall.
*The case is Lucky Brand Dungarees, Inc., et al., v. Marcel Fashions Group, Inc., 18-1086 (U.S.).
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