This spring, LVMH Moët Hennessy Louis Vuitton quietly upped its existing stake in Italian jewelry brand Repossi. The Paris-based luxury goods conglomerate went from having a 42 percent ownership stake in the 99-year old jeweler to amassing a holding of 69 percent. Now, the world’s largest luxury goods group – which owns fashion brands like Louis Vuitton, Dior, Givenchy, and Celine, as well as ventures, such as Sephora, watchmakers Hublot and Tag Heuer, and a long list of Wines & Spirits companies – is said to be looking to bolster its jewelry offerings further by way of an acquisition of Tiffany & Co.

According to reports from an array of business publications, LVMH approached Tiffany & Co. with an “unsolicited” acquisition offer to the tune of $14.5 billion. The Finacial Times reports that Tiffany & Co. received the all-cash offer – which was “pitched at about $120 per Tiffany share, a premium of about 30 percent to its  share price at the time” – earlier this month, and while it the American jewelry company has reportedly hired advisers to “review LVMH’s offer, but has not yet responded to it,” per CNBC, it is “expected to rebuff” the initial offer.

Incorporating 182-year old Tiffany & Co. into its arsenal of brands would enable LVMH to “scale in hard luxury to rival that of Johann Rupert’s Richemont, which owns Cartier and Van Cleef and is the market leader in this part of the industry,” per the FT. “Analysts say that Tiffany has scope to expand into watches, and it would increase LVMH’s client base in the core US market while opening up opportunities with customers who are unable to afford its more expensive Bulgari brand,” particularly since Tiffany & Co. has been introducing lower-cost items in an attempt to woo younger consumers.

More than that, a Tiffany & Co. acquisition “would further diversify the conglomerate, which has been riding a wave of luxury demand in China but faces risks including that country’s trade war with the U.S. and the months-long anti-Beijing protests in Hong Kong,” according to Bloomberg, which noted that if successful, the deal “would be the biggest yet for LVMH founder and Chairman Bernard Arnault, Europe’s richest man,” whose group has fared remarkably well in recent years in light of the “booming Chinese appetite for branded goods.”

“Tiffany, on the other hand, has not been as resilient,” CNBC notes. “Beyond the tariffs that have been triggered by the trade war between the United States and China, a lower Chinese domestic sales tax has also contributed to double-digit decreases in its sales to Chinese tourists in the United States and in other destinations.”

UPDATED (October 28, 2019): In a statement provided to WWD, a rep for LVMH said, “In light of recent market rumors, the LVMH Group confirms that it has held preliminary discussions regarding a possible transaction with Tiffany.”

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Can you legally take apart authentic pieces of jewelry and sell the individual components? That was the question at the center of a recently-decided case before the UK’s Intellectual Property Enterprise Court, which pitted Nomination – which found fame amongst U.S. consumers back in the early 2000s with its modular, customizable charm bracelets – against JSC Jewellery over the latter’s practice of buying Nomination bracelets, taking them apart, and selling the individual links alongside its own copycat products on its e-commerce site.

When Nomination got wind of JSC’s actions, it filed suit, pointing to Article 7 of the Trade Marks Directive, and alleging that – among other things – JSC’s sale of individual authentic Nomination links ran afoul of its trademark rights. In its complaint, Sesto Fiorentino, Italy-based Nomination asked the court to permanently ban JSC from selling its products in this way.

According to the EU’s Trade Marks Directive, “It follows from the principle of free movement of goods that a trademark [holder] should notbe entitled to prohibit its use by a third party in relation to goods which have been put into circulation in the [EU] … by [the trademark holder] or with its consent.” An exception to that rule? If the trademark holder has “legitimate reasons to oppose” such use.

In the case at hand, the court was unwilling to find that Nomination did not consent to the presence of the individual bracelet links in the market, as the brand failed to formally prohibit its authorized retailers from selling individual links. More than that, the court determined that Nomination could not object to its bracelets being disassembled by purchasers, since a consumer’s ability to add and remove links to fully customize her bracelet is at the core of the appeal and function of the bracelets, which further chipped away at Nomination’s lack of consent argument.

Given Nomination’s failure to establish a lack of consent, the court turned its attention to whether Nomination had any “legitimate reasons to oppose” the individual sale of the links by JSC. To this, the bracelet company asserted a number of concerns, most significantly that it sold its bracelets and links in high quality packaging, while JSC was selling them in plain plastic packaging.

The court decided that the upscale packaging that Nomination used for its bracelets was an integral part of its efforts to conveyed a luxury brand image to consumers, which bolsters the reputation and value of its trademark-protected name and its brand as a whole. With that in mind, the court stated that by offering up Nomination’s products in low quality packaging, JSC was likely to damage Nomination’s carefully-created and maintained reputation,  which it found to be a “legitimate reason” for the opposition of such sales.

The decision from the court is “confirmation that the right to resell branded goods is not [without limitation,” according to Louisa Dixon, a partner at Taylor Vinters LLP, who specializes in intellectual property and brand protection. The decision, she states, “will be welcomed by brand owners, particularly owners of luxury brands, as a further example of circumstances in which they may be able to oppose the resale of their goods.”

It will prove interesting to see if this decision is used by brands to extend to the sale of authentic individual watch parts. Rolex, for instance, is notoriously protective of the parts that go into its timepieces, especially since the Swiss brand considers otherwise authentic watches that have been supplemented with non-Rolex parts to be entirely counterfeit, which has given rise to an array of litigation against jewelers and individual sellers, alike.

As for what may be the biggest question of all here: will Nomination’s bracelets have a resurgence in popularity now that all things nostalgia are back, if 90’s sportswear staples, grunge throwbacks (a la Marc Jacobs), bucket hats, and fanny packs are any indication, it seems like there just might be a chance.

“Since 2008—when it helped drive the U.S. economy into the ground, then took money from the government to keep itself afloat—Bank of America has made a lot of promises.” One of those promises was to “invest in women’s economic empowerment and leadership.” Now, the banking giant – and its “time-tested values of greed and sexism” – has allegedly failed to make good on that particular vow, and has landed on the receiving end of a $1.1 billion lawsuit filed by Alex and Ani, which says that the bank’s fraudulent “image-rehabilitating marketing” efforts and its “discriminatory and illegal lending practices” are an “existential threat” to its otherwise booming business.

According to the 34-page complaint that Rhode Island-based Alex and Ani filed in a New York federal court last week, the popular bracelet-maker entered into an agreement with Bank of America (“BoA”) in January 2016 in furtherance of which the bank agreed to provide a revolving line of credit to help fund Alex and Ani’s operations, as long as the company “made timely payments and otherwise complied with specified contractual terms.”

Alex and Ani – whose $33 dollar or so bangle bracelets are selling at a rate of 10 million a year, propelling the brand to unicorn status, and landing founder Carolyn Rafaelian on Forbes’ “Richest Self-Made Women” list – asserts that it held up its end of the bargain by meticulously making its payments on time and in accordance with the parties’ terms, but “in December 2018, BoA broke its promise.”

“With no warning, and in breach of its contractual obligations, BoA falsely and fraudulently … declared a default under the 2016 agreement,” the 15-year old jewelry company claims. In rescinding their agreement by declaring a default that did not exist, a move that coincided with the appointment of Alex and Ani CFO Andrea Ruda, BoA “cut off Alex and Ani’s access to its revolving credit line.”

In case that is not enough, Alex and Ani claims that BoA “tortiously interfered with [its] business, starving it of marketing and operational funding [it] was contractually guaranteed under the agreement.” And for more than six months, “BoA has been both driving Alex and Ani towards bankruptcy and milking it for literally tens of millions of dollars in fees” stemming from the “falsely”-declared default.  In doing so, BoA “set off a cascading series of events that have cost Alex and Ani more than $1.1 billion in direct expenses, lost revenues, and diminished market value,” all while using the female-founded and run brand “as free advertising for its supposed commitment to diversity and the American Dream.”

It turns out, behind its “woke advertising,” BoA “is decidedly retrograde in its views toward women, toward people of color, and towards other protected groups,” the complaint asserts.

BoA has a “long, entrenched history of illegal discrimination,” particularly when it comes to women, Alex and Ani argues, pointing to “eight separate [disclosed] discrimination settlements, totaling $210 million, between January 2000 and January 2019,” and a 2010 lawsuit, in which BoA was sued for gender discrimination by a class of approximately 4,800 current and former female financial advisers.

In 2016, BoA “was sued again for gender discrimination,” Alex and Ani’s complaint notes, with “the plaintiff in that case —one of BofA’s top female employees—describing the bank as a ‘bro’s club’ that favored male employees over women.”

The bank’s “sexist, discriminatory … culture” has since taken to targeting Alex and Ani, and the jewelry company “brings this case to put an end to [BoA’s] nonsense.” Alex and Ani says that is bringing this lawsuit “to regain what it would already have had from a fair, law-abiding lender: the benefit of its bargain under the Agreement, and a bank whose practices match its glossy marketing—i.e., one that doesn’t recoil at female-run corporations and women in the boardroom.” More than that, the jewelry company says that “it is time for BoA to treat Alex and Ani fairly—and in accordance with [its]  obligations—even though Alex and Ani is run by strong, powerful women.”

Alex and Ani have filed claims for breach of contract, tortious interference with prospective business relations and violation of the Equal Credit Opportunity Act, and are seeking declaratory and injunctive relief and $1.1 billion in compensatory damages, punitive damages, and disgorgement of “ill-gotten gains.”

“Bank of America’s demonstrated record of support for diverse businesses is well-noted and widely recognized,” a spokesman for BoA told Bloomberg.

UPDATE (August 20, 2019): Less than a month after Alex and Ani filed suit, and before BoA has filed a response, it has voluntarily dismissed its case in its entirety. In the filing, counsel for the jewelry company states that it is moving to “voluntarily dismiss the action with prejudice,” noting that the dismissal “has been filed before Defendant has filed an answer or a motion for summary judgement.” While the impetus for the dismissal was not cited in the filing, it almost certainly indicates that the parties settled their differences out of court by way of a confidential settlement agreement.

*The case is Alex and Ani LLC et al v. Bank of America N.A. et al, 1:19-cv-06929 (SDNY).

Kenneth Jay Lane made his name as the “undisputed king of costume jewelry.” The late jewelry designer had a knack for turning faux baubles into bona fide statement pieces, and in doing so, found fans in former First Ladies Jackie Kennedy and Nancy Reagan, iconic film stars Elizabeth Taylor and Audrey Hepburn, and royalty, such as Princess Diana. While Lane’s work was once viewed as little more than glorified copying, it has since been elevated to an art all its own: costume jewelry. But that does not mean that his eponymous label is immune from legal scuffles with the brands from which it takes “inspiration.”

According to a newly-filed design patent infringement and unfair competition lawsuit, at least one jewelry company is none too pleased with Kenneth Jay Lane’s designs. Famed Italian jeweler Bulgari filed suit against Kenneth Jay Lane, Inc. (“KJL”) in a New York federal court this week, alleging that the well-known costume jewelry brand is running afoul of the law by making a copycat version of its design patent-protected Serpenti ring, one that bears a price tag of more than $15,000.

This is not just a straightforward copying case, though. LVMH Moët Hennessy Louis Vuitton-owned Bulgari claims that by making the lookalike ring, KJL is in direct violation of a settlement agreement that they entered into after Bulgari sued KJL several years ago. It turns out, 135-year old Bulgari filed suit against KJL in August 2012, when it first began making and selling an allegedly infringing Serpenti bracelet, accusing the company of copyright infringement, design patent infringement and unfair competition.

Bulgari and KJL managed to settle their differences out of court within two weeks of the initiation of Bulgari’s suit, entering into a settlement agreement, dated August 30, 2012.

In accordance with their legally binding deal, Bulgari claims that KJL “agree[d] to cease and desist from designing, selling, promoting, advertising, marketing, and/or commercially exploiting … anywhere in the world, any products” that are “substantially the same in appearance” to the Serpenti design patent. KJL further agreed that it would “not use, or direct any third party to use any Bulgari products, whether they be physical products or images thereof, in the process of designing or sourcing any KJL products, without Bulgari’s express written authorization.”

In the wake of their settlement agreement, the two brands managed to co-exist in peace until June 2019 when Bulgari became aware that KJL was selling a ring that is “substantially the same as [its] design patent-protected [Serpenti]” design.

Bulgari’s Serpenti design patent (left) & KJL’s right (right)

According to its newly-filed lawsuit, Bulgari claims that after discovering that KJL was selling a ring that looked a bit too much like its legally-protected design, it provided KJL with written notice of the alleged infringement in accordance with the terms of their 2012 settlement. In response, Bulgari alleges that “KJL’s President, rather than complying with the cure provisions of the settlement agreement, initially advised that he did not know who put out the infringing product, and that ‘it appears that [they] are putting our name on something that is not being sold by us.’”

Thereafter, “KJL’s President further advised that ‘the ring in question has been found to be offered by our licensee, CZ by Kenneth Jay Lane,’” a license that KJL has maintained with jewelry-maker Rouge Jardin since 2009, in furtherance of which Rouge Jardin may use the KJL name to make and market jewelry in exchange for a fee and royalties paid to KJL.

In light of KJL’s claim that it “had absolutely no knowledge that the ring was being offered” and that  Rouge Jardin is “an independent company only affiliated with [KJL] through the license,” Bulgari has called foul. Bulgari argues the license agreement between KJL and Rouge Jardin includes a requirement that “KJL reviews and approves all jewelry products sold under the CZ by Kenneth Jay Lane.” More than that, Bulgari points to promotional materials for the CZ collection, which state that that “CZ by Kenneth Jay Lane products are designed ‘under the watchful eye of Kenneth Jay Lane’” and created a result of the “collaborative talents of these two industry icons [referring to KJL and Rouge Jardin].”

As such, Bulgari claims that both KJL and its licensee are liable for design patent infringement and unfair competition, while KJL, alone, is on the hook for an additional breach of contract claim in connection with its alleged breach of the parties’ 2012 settlement agreement.

Bulgari is seeking relief in the form of preliminary and permanent injunctions, barring it “infringing on Bulgari’s [Serpenti] design patent and unfairly competing with Bulgari in any manner.” The famed brand is also seeking “an accounting for all gains, profits and advantages derived from [the defendants’] wrongful acts,” and payment to Bulgari of any damages sustained as a result of such acts.

*The case is Bulgari S.p.A. et al v. Kenneth Jay Lane, Inc. et al, 1:19-cv-06878 (S.D.N.Y.)

Six months after a New York federal court ordered Costco to pay up $25 million for using Tiffany & Co.’s name on non-Tiffany & Co. engagement rings, the famed New York-based jewelry company has asked the Second Circuit Court of Appeals to uphold the lower court’s decision. Tiffany & Co. – which describes its “Tiffany” trademark is one of the “most iconic in the world” – claims that despite the “false narrative” that Costco is creating in connection with the 6-year long case, “the District Court and the jury properly found for Tiffany, and the judgment should be affirmed.”

Unsatisfied with the outcome at the district court level, Costco filed an appeal with the U.S. Court of Appeals for the Second Circuit in September 2017, arguing, among other things, that the court erred in its determination of whether its rings did, in fact, meet the higher bar required for a finding of counterfeiting, as opposed to trademark infringement. Counsel for Tiffany & Co. presented evidence during trial that Costco’s use of the “Tiffany” trademark intentionally created a likelihood of consumer confusion, which is the central element in a trademark infringement claim. However, as Costco pointed out, in order to determine whether such infringement reaches the level of counterfeiting, the trademark at play must be “identical to or substantially indistinguishable from” the rightsholder’s mark.

In response to Costco’s appeal, Tiffany & Co. argues in a newly filed 73 page brief that the lower court’s grant of summary judgment on the issues of trademark infringement and counterfeiting liability – which stems from Costco’s sale of $6,000-plus diamond rings labeled as “Tiffany” that thereby, gave hundreds, if not thousands, of Costco members the wrong impression about the origin of the sparklers – should stand for a number of reasons.

First, Tiffany & Co. asserts that “it is undisputed that Costco” – which is the fourth largest retailer in the world – “intentionally used [its] famous name in point-of-sale signs to sell inferior copies of an engagement ring [style] for which Tiffany is renowned.”

Tiffany & Co. states that “the Polaroid factors” – the elements used to determine whether there is a likelihood of consumer confusion at play, and thus, trademark infringement – “overwhelmingly favor Tiffany,” and as the lower court observed, “Costco did not offer any evidence ‘affirmatively demonstrating that consumers were not confused by the use of the Tiffany word mark in [its] display case signs.’”

“Tiffany” rings at Costco (image via brief)

In fact, Tiffany & Co.’s counsel claims that “Costco admitted that it intentionally used ‘Tiffany’ in signs to describe otherwise unbranded rings, despite knowing that this word was a strong, world- renowned trademark, and without taking any steps to prevent consumer confusion.” And it worked, as the famed jewelry company says that its surveys revealed that a number of “Costco members took their rings home believing they were real Tiffany rings.”

Such a likelihood that consumers would be led to believe that there was a connection between the “Tiffany” rings that Costco was selling and the jewelry brand was bolstered by the fact that “Costco is famous for offering bargains on authentic brand-name products … including those of high-end brands like Louis Vuitton, Prada, Tag Heuer, Armani, Rolex, Cartier and even Tiffany,” Tiffany & Co. argues. “Since most luxury brand manufacturers like Tiffany do not want their products sold in large unadorned warehouses, they will not supply product to Costco,” forcing the Issaquah, Washington-headquartered multinational retail corporation to “source goods from outside normal distribution channels … acquiring off-price seconds, gray market items and overstock from secret sources.”

Still yet, counsel for Tiffany & Co. notes that while “Costco had no proof that ‘Tiffany’ as a standalone [trademark] is generic [as opposed to serving as an indicator of source], that it was the only way to identify this particular ring style, or that it was ever popularly used descriptively for this design,” the retailer argued – albeit unsuccessfully – that its use of the Tiffany name was a “lawful fair use.”

In addition to shooting down Costco’s arguments about its intent (“Costco’s claims of innocent intent, both in terms of using ‘Tiffany’ descriptively and in trying to shift blame to vendors, are nothing more than self- serving conjecture.”) and damages (“Costco’s argument that actual damages are required before punitive damages may be awarded is wrong.”), Tiffany & Co.’s counsel states that Costco is “seeking reversal [of the district court’s findings] by misstating the evidence, mischaracterizing cases, and ignoring its own failures of proof.” The court should do no such thing, the brief essentially asserts, and instead, “the judgment appealed from should be affirmed in all respects.”

UPDATED (August 14, 2019): In response to Tiffany & Co.’s filing, counsel for Costco argued that the jewelry company’s brief July brief – in which it formally asks the Second Circuit Court of Appeals to uphold the lower court’s decision in its favor, including the $25 million damages award – sounds more like “a closing argument to a jury” than the “defense of an ‘improperly’ resolved summary judgment finding.”

As first reported by Law360, “Costco is asking the court of appeals to reverse the lower court’s ruling that held the big-box retailer liable for trademark infringement and counterfeiting,” arguing that “the case belongs before a jury because the parties offer ‘fiercely competing narratives about the mountains of evidence’” at play, including “whether Costco’s rings at issue were, in fact, counterfeits “and whether the [Tiffany name-bearing]  signs were infringing.”

*The case is Tiffany & Co. v. Costco Wholesale Corp., 17-2798 (2nd Cir).