Mario Valentino is taking action against Fashionphile, accusing the resale company of trademark infringement, false advertising, and unfair competition in a newly-filed lawsuit. According to the complaint that it filed with the U.S. District Court for the Southern District of New York on Friday, Mario Valentino – a mid-market accessories brand that is not affiliated with the similarly-named luxury brand Valentino, S.p.A. – claims that it discovered this spring that Fashionphile has been offering up products using Mario Valentino’s federally-registered “VALENTINO” trademark in a manner that is “not authorized to promote goods that were neither manufactured by, purchased from, or authorized by Mario Valentino (or its exclusive licensee) in the U.S.”
For some background on its trademark rights, Mario Valentino asserts that it is “the first and senior owner of the registrations of the VALENTINO family of trademarks on leather handbags and similar goods in the U.S.,” including its almost 50-year-old registration (no. 0951621) for “VALENTINO” for use on “handbags and luggage.” With that registration in mind, Mario Valentino claims that it put Fashionphile on notice of its allegedly unauthorized use of the VALENTINO trademark in connection with the advertising/sale of Valentino, S.p.A. bags and footwear – and demanded that the Carlsbad, California-based reseller immediately cease such alleged infringement – by way of a cease-and-desist letter at the end of May 2022.
“Despite follow-up cease and desist letters, and despite Fashionphile continuing to represent that it would comply with Mario Valentino’s demands, it has not done so,” Mario Valentino asserts, arguing that as of the time of filing, “nearly four hundred women’s handbags and clutches are advertised on Fashionphile’s website as ‘VALENTINO’ at prices ranging from $200 to $2,800.” Against this background, Mario Valentino sets out claims of trademark infringement, false association, false advertising, unfair competition, and deceptive acts and practices unlawful in violation of the New York General Business Law against Fashionphile, and is seeking injunctive relief, as well as monetary damages.
While this may appear on its face to be something of a straightforward trademark case waged by a brand against a reseller that is allegedly engaging in infringement (à la Chanel v. The RealReal), a closer look reveals that there is much more going on. In fact, more than merely a legal squabble with Fashionphile, Mario Valentino’s suit is better characterized as an escalation of its existing – and higher stakes – fight against Valentino, S.p.A. (“Valentino”). After all, the bags that Mario Valentino points to in its complaint as being advertised in an infringing or otherwise improper way are not Mario Valentino bags, but those from Valentino.
TFL readers will know that Valentino filed suit against Mario Valentino in a California federal court in July 2019, alleging that the unaffiliated brand and its American licensee are on the hook for false advertising, unfair competition, and design patent infringement for “actively engaging in a campaign to trade off Valentino’s goodwill in the U.S. handbag market.” That still-ongoing legal battle – which also includes a separate but related fight before Italian courts – centers on a co-existence agreement that the two Valentinos entered into more than 40 years ago in an attempt to avoid consumer confusion and corresponding legal complications stemming from their nearly-identical monikers and relatively similar offerings.
In accordance with the 1979 co-existence agreement, Mario Valentino – which got its start in 1952 as a footwear and leather goods company – is “permitted to use the ‘V’ or ‘Valentino’ mark on the outside of its handbags [and marketing], but is not permitted to use the ‘V’ and ‘Valentino’ marks together,” but it “must also use the ‘Mario Valentino’ mark on the inside and packaging of all handbags to avoid consumer confusion.” In other words, Mario Valentino can use the “VALENTINO” name on leather goods, such as handbags, assuming it includes the full “Mario Valentino” name on the inside.
Meanwhile, the agreement limits how Valentino – which was founded by Valentino Garavani in 1960 and was far better known for couture than handbags when the agreement was signed – can use the “VALENTINO” name. In particular, it mandates that for leather handbags, and other similar goods, Valentino “may only use its [V] symbol and/or ‘VALENTINO GARAVANI.’” Put simply, Valentino “must utilize the term ‘GARAVANI’ in addition to ‘VALENTINO’ to minimize consumer confusion between the parties.”
In response to Valentino’s claims, Mario Valentino set out claims of its own in 2020, accusing Valentino of breaching the co-existence agreement by way of its advertising. Since 2017, Valentino has “prominently placed ‘VALENTINO’ in its advertising for handbags, removing and/or significantly reducing the appearance of the required term ‘GARAVANI,’” Mario Valentino argued, claiming that its rival breached the co-existence agreement and engaged in trademark infringement.
And in an argument that foreshadowed the potential for claims against retailers (or resellers) of Valentino goods, Mario Valentino has also argued that Valentino should be held contributorily liable for the alleged infringement of at least one of its authorized retailers. According to Mario Valentino, authorized Valentino retailer FORWARD by Elyse Walker also infringed its trademarks by “advertising Valentino products as ‘VALENTINO BAGS’ but making no reference to the term ‘GARAVANI’ in its advertising.”
As of the last status update, which came in July, not only was the U.S. case still underway, but the parties’ fight in Italy had also not been resolved.
THE BIG PICTURE
Given that Valentino and Mario Valentino appeared to peacefully co-exist in the market for four decades, the agreement seemed to function effectively. However, Mario Valentino’s new lawsuit against Fashionphile and its existing battle against Valentino are an indication that this is no longer the case.
As for what is driving the legal squabble from a big-picture perspective, Valentino argues in its lawsuit that the clash follows from Mario Valentino’s quest to “intentionally … trade off [its] goodwill in the handbag market,” and “lead consumers to believe that Mario Valentino handbags are the same Valentino bags available at luxury retailers.” Such efforts to piggyback on the Valentino brand come by way of Mario Valentino’s alleged copying of the design of Valentino S.p.A.’s bags, and its advertising, the latter of which is “intentionally designed to confuse consumers into believing Mario Valentino handbags are actually Valentino handbags being sold at discount, and/or a diffusion line of Valentino handbags that retails at lower prices,” per Valentino.
At the same time, it is difficult not to consider the transformation of Mayhoola-owned Valentino – now an accessories powerhouse thanks to its offerings like its Rockstud footwear, and Roman Stud and VLogo bags – since the co-existence agreement was signed in 1970. As of 2021, Valentino’s annual sales rose to 1.23 billion euros, with accessories representing 66 percent of sales, compared to 32 percent from ready-to-wear. As such, the breakdown of the parties’ arrangement is likely driven in no small part by the robust expansion by Valentino into leather goods, etc., which generate substantial revenues and margins for luxury brands, particularly when compared to luxury apparel, and the limits that the co-existence agreement places on it from an accessories – and from a potential M&A – point of view.
Due to the sheer size of – and Valentino’s ambitions for – its accessories business, and in light of Mario Valentino’s “senior trademark registrations for the VALENTINO trademarks, [which] present an obstacle to [Valentino’s] growth in the leather handbag marketplace,” Mario Valentino argues that its allegedly improper use of the “Valentino” mark without “Garavani” is part of a larger scheme “to expand its leather handbag business and reap millions of dollars in profits, so that it could sell its company for a higher price to investors.”
Valentino has no shortage of trademark rights in and registrations for its name and logos – from Valentino for use on eyewear, and Valentino Garavani on handbags, footwear, and clothing to the V logo for use on nearly any category of goods – that another party would take ownership of if it acquired the Valentino brand. Nonetheless, it is difficult not to acknowledge that an acquiring party may take issue with the fact that one core element is missing from the brand’s portfolio: the ability to offer up leather goods and footwear under the VALENTINO name on its own and the potential for litigation, such as the case at hand, to come about as a result. (With that in mind, its case against Fashionphile very well could be a strategic play by Mario Valentino to try to gain leverage in the Valentino matters.)
Taken together, such issues have set the stage for a protracted, bi-national legal battle that only appears to be gaining in steam if Mario Valentino’s newly-filed suit is any indication.
A rep for Fashionphile was not immediately available for comment.
The case is Mario Valentino S.p.A v. Fashionphile Group LLC, 1:22-cv-08984 (SDNY).