Simply reversing the order of the letters in the word “Supreme,” slapping that made-up word on apparel, and then filing a trademark application for registration for it with the U.S. Patent and Trademark Office (“USPTO”)? That will land you on the receiving end of an opposition proceeding with VF Corp.-owned streetwear brand Supreme. That is, after all, what has played out since Ontario, Canada-based Urban Coolab Inc. filed a trademark application in May 2020 for “EMERPUS” for use on apparel and retail store services.
In an opposition proceeding initiated in January, counsel for Supreme’s corporate entity Chapter 4 Corp. argued that Urban Coolab’s application should be blocked by the USPTO’s Trademark Trial and Appeal Board, as “EMERPUS” is not an indicator of the source of the Canadian apparel brand’s products. Instead, it is “merely [Chapter 4’s] SUPREME word mark spelled backwards” that Urban Coolab is using in an “effort to associate [its] goods and services with [Chapter 4’s] well-known SUPREME brand,” an argument that Chapter 4 bolsters by noting that Supreme has used its own mark in a similar way by adorning its coveted wares with a flipped version of its famed box logo.
Speaking specifically to its “exclusive federal and common law rights for the ‘SUPREME’ marks,” for which it “owns hundreds of trademark registrations worldwide,” Chapter 4 claimed that it has used the marks “since at least as early as April 1994” when “the first Supreme retail store opened [and] offered a host of clothing, bags and related products and accessories” bearing the Supreme name and red-and-white rectangular logo. As for the “fame” associated with the “SUPREME” trademarks, Chapter 4 pointed to: (1) its “consistent and exclusive of use of the [marks] over nearly the past 25 years in the United States and throughout the world, including in connection with apparel, bags, accessories, skateboard decks, streetwear-related products and other merchandise; (2) unsolicited media attention about the Supreme brand; and (3) the worldwide sales of Supreme branded goods in the hundreds of millions of U.S. dollars.”
With the foregoing in mind and due to Chapter 4’s “extensive use of the SUPREME marks” – from its word mark to its red-and-white box logo, Chapter 4 alleged that these marks have become “famous and are an asset of substantial value to [Chapter 4] as a symbol of [the Supreme brand], its quality goods and services, and goodwill.” As such, the company has argued that if Urban Coolab is “permitted to obtain a registration for [the EMERPUS] mark,” that would “cause damage and injury to [Supreme’s] business reputation and goodwill and would injure and impair [its] senior rights in its ‘SUPREME’ marks.”
In addition to “dilut[ing] the distinctive quality of the SUPREME marks, which have been famous since prior to the filing date of [Urban Coolab’s] application or any alleged date of use in commerce of [Urban Coolab’s] mark,” given that the “EMERPUS” mark “so resembles” Chapter 4’s SUPREME marks, the group declared that it would likely cause confusion amongst consumers. In other words, Urban Coolab’s use of the “EMERPUS” mark on apparel and accessories will “generate the erroneous impression that [its] goods and services originate with [Supreme] or that [its] goods and services are authorized, licensed or endorsed by, or are connected or associated in some way with [Chapter 4] or the SUPREME marks” when they are not.
As such, Chapter 4 asserted that its opposition should be sustained, and that registration of Urban Coolab’s mark should be denied.
In the answer that it filed last month, Urban Coolab pushed back against Chapter 4’s assertions, denying that the streetwear company and its corporate arm would be damaged by the registration of the “EMERPUS” mark, and also denying Chapter 4’s claim that it is using the “EMERPUS” mark to piggyback on the appeal of the Supreme brand, despite the similar marks and the similar stylizations of the marks. (While Urban Coolab’s application states that its “mark consists of standard characters without claim to any particular font style, size, or color,” it wares, nonetheless, feature the word “EMERPUS” in white block lettering inside a rectangular red box, thereby, mirroring the look of Supreme’s box logo). The brand also sets out a number of defenses, asserting that, among other things, “there is no likelihood of confusion, mistake or deception” at play.
In preliminarily arguing its case, Urban Coolab requested that the Trademark Trial and Appeal Board (“TTAB”) dismiss Chapter 4’s opposition with prejudice, and grant it “any and all such further relief as may be appropriate.”
Fast forward to March 1, and Chapter 4 has asked the trademark body to temporarily put the proceedings on hold, telling the TTAB that “the parties are actively engaged in negotiations for the settlement of this matter,” and has requested that “this proceeding be suspended for 30 days to allow the parties to continue their settlement efforts.” In a motion on the same day, the TTAB granted Chapter 4’s motion, suspending the matter “subject to the right of either party to request resumption at any time.”
UPDATED (April 7, 2021): Following Chapter 4’s March 1 motion to suspend proceedings on the basis that “the parties are actively engaged in negotiations for the settlement of this matter,” counsel for Urban Coolab filed to abandon its application to register EREMPUS on April 6. Sustaining the opposition and refusing the application, the TTAB terminated the action on April 7.
Thailand’s National Office of Buddhism says that it is weighing its options in terms of legal action against Supreme for putting an image of Luang Phor Koon on apparel without its authorization. According to a statement released on February 19, the National Office of Buddhism is drafting a letter to the New York-based streetwear brand over its “Blessings Ripstop Shirt,” which is included in a Spring/Summer 2021 collection, and which bears an image of the late monk surrounded with yant script, a sacred form of tattoos reserved for Buddhist monks and Brahmin holy men.
A representative for the National Office of Buddhism revealed that the image that appears on the buzzy Supreme wares – which depicts the celebrated monk sitting and smoking – is one of the “most popular” photos of Luang Phor Koon, who died in 2015, and is said to have been taken in or around 2002 with the monk’s permission. Initially printed on products to raise funds for Wat Ban Rai, a Nakhon Ratchasima province temple, the National Office of Buddhism says that VF Corp-owned Supreme did not seek out – or receive – permission to use the image, thereby, giving rise to potential issues of misappropriation and copyright infringement.
The possible copyright infringement claims at play are not necessarily straightforward, though. While the image of Luang Phor Koon and the yant tattoo design – both of which were allegedly utilized by Supreme without the Wat Ban Rai’s consent – are creative works capable of being protected by copyright, issues of authorship and ownership abound. Thailand’s Department of Intellectual Property director-general Vittikrai Leewiraphan said that since the intellectual property body does not currently maintain a copyright registration for the specific image or the yant design, the Wat Ban Rai will need to present proof that it created the image and design, and thus, maintains ownership over them. (If the Wat Ban Rai can establish ownership, its rights in the creative work endure for 50 years from the creation of the image.)
The Bangkok Post reports that “despite the lack of registration,” the works in question are, in fact, “artistic” in nature, and the owner – presumably the Wat Ban Rai – is entitled to “full copyright protection,” making “any replication, modification, disclosure in public or use of the creation without consent an infringement of intellectual property law.”
Reflecting on the budding legal squabble, Rouse’s Jakarta-based Deputy CEO and enforcement head Nick Redfearn says that the image of the famed monk that appears on the Supreme shirts “is probably protected by copyright, but subsistence and ownership may need to be proven.” At the same time, Redfearn notes that some experts have argued that yant is considered a work of applied art, and in Thailand, copyright in such works lasts 25 years from the date that the work was created/published.” As such, he says that “it is not clear if the copyright has expired.”
Meanwhile, Tawatchai Sanprasit, who is the manager of the Wat Ban Rai temple, said in a statement, “We will discuss the issue [with Supreme], and find out what the brand’s purpose is,” noting that the temple will then decide what action can be taken against the brand.
Hardly Supreme’s first tangle with allegations of infringement, the brand, which was recently acquired by North Face owner VF Corp., is currently in the midst of a trademark infringement, false designation of origin, and unfair competition lawsuit that was filed against it in a California federal court in September. In that case, Spirit Clothing Company accuses Supreme’s corporate entity Chapter 4 Corp. of copying its staple jersey, which “is inherently distinctive and protectable as a trademark.”
Off-White is doubling-down on the argument that its use of quotation marks acts as an indicator of source in the same way as other trademarks, with the buzzy brand lodging a trademark application for “For Walking” – quotation marks included – for use on … footwear with the U.S. Patent and Trademark Office (“USPTO”) in late October. The application is the latest quotation-centric trademark filing from the brand, joining the already-pending one that the Virgil Abloh-helmed company filed for “Product Bag” for use on “tops as clothing; bottoms as clothing” in May 2019. And just as in the case of the “Product Bag” application, the USPTO is taking issue with Off-White’s quest to register “For Walking,” issuing a non-final Office Action early this year.
In a January 6 Office Action, an examining attorney for the USPTO has preliminarily refused to allow Off-White’s application to move forward in the registration process on the basis that the “For Walking” mark “merely describes a feature and purpose of [Off-White’s] goods.” According to the letter, examining attorney Shaunia Carlyle states that a mark is merely descriptive of the goods or services cited in the application “if it describes an ingredient, quality, characteristic, function, feature, purpose, or use of an applicant’s goods and/or services,” and that is precisely what is going on here, as “WALKING is an activity done on foot,” meaning that “the wording [of the “FOR WALKING” mark] describes a purpose of the goods – to be used FOR WALKING.”
Carlyle elaborates, citing the U.S. Court of Appeals for the Federal Circuit, which held in In re Oppedahl & Larson LLPthat “a mark may be merely descriptive even if it does not describe the ‘full scope and extent’ of the applicant’s goods or services.” Instead, “it is enough if a mark describes only one significant function, attribute, or property.”
Off-White now has six months to either submit arguments and evidence in support of registration on the USPTO’s Principal Register or to amend its application for registration to the Supplemental Register, a separate register that provides protection for non-distinctive marks that may be capable of acquiring distinctiveness.
The Red Zip Tie
Meanwhile, the USPTO recently issued a separate Office Action for another pending Off-White trademark application: this time in connection with Abloh’s brand’s quest to register a red zip tie for use on footwear. Off-White has faced repeated pushback from the USPTO since it filed its application for the zip tie mark back in July 2018, with the examining attorney setting out an array of bases for preliminary refusal – including functionality and non-distinctiveness – in three Office Actions prior to the most recent one.
In the latest zip tie Office Action, which was filed on January 6 and which follows from Off-White’s submission of a new drawing to show the placement of the zip tie (as opposed to its previously-submitted drawing, which showed just the shape and color of the zip tie, itself), USPTO examiner Verna B. Ririe asserts that “based on the amended drawing, registration is [still] refused.” The reason? “Because the applied-for mark as used on the specimen of record is merely a decorative or ornamental feature of the goods and, thus, does not function as a trademark to indicate the source of applicant’s goods and to identify and distinguish them from others.”
Ririe states that here, “the mark as shown on the specimen would be perceived as merely a decorative or ornamental feature of the goods because the specimens” – i.e., examples of how Off-White is actually using the mark – show that it is used “as a decorative feature of footwear such that consumers are induced to buy the goods because of this decorative feature.” There is likely an argument to be made that consumers are, in fact, drawn to Off-White sneakers that bear the red zip tie. However, at the same time, it could be argued that the allure of the red zip on those sneakers is not the result of the appearance of the zip tie on its own on those sneakers. In other words, it is not the sheer aesthetics of the zip tie that prompt consumers to shell out hundreds of dollars for Off-White footwear.
Instead, the consumer demand for such zip tie-adorned sneakers is more precisely a direct result of the fact that certain consumers link the zip tie to the Off-White brand and thus, want to own the sneakers due to the source-identifying function that the zip tie plays, and the goodwill associated with the little red plastic tag, at least some of which bear the Off-White word mark, according to a response that the brand provided to the USPTO last year.
To date, Off-White has responded to opposition from the USPTO over the zip tie, arguing that the its use of the red zip tie has amassed the requisite level of secondary meaning in the minds of consumers to function as a trademark as a result of widespread media attention, advertising, and sales. The 8-year old brand argued that the zip tie has become so well known that “when consumers see [it] affixed to [Off-White’s] goods, they immediately understand the product to have originated with [Off-White].”
Proof of that, according to the brand: the fact that “many consumers who purchase [Off-White products] choose to leave [the zip tie] affixed to the outside of the product, even though it could be easily removed.”
In addition to making its case for secondary meaning, Off-White has taken issue with a previously-asserted non-distinctive configuration refusal, asserting in its March 2020 response to a previous USPTO Office action that the zip tie is not actually part of any of its sneaker product designs, but instead, “is more properly classified as product packaging,” which is significant, as product packaging can be inherently distinctive, thereby, removing the need to establish acquired distinctiveness. (It is worth noting that Ririe states in her January 6 Office Action that the non-distinctive configuration – and the functionality – refusals have been withdrawn).
As for what Off-White can do next, Ririe notes that “in appropriate circumstances, an applicant may overcome [a “merely descriptive”] refusal” in a number of ways, including – but not limited to – amending its application to seek registration in the Supplement Register, claiming acquired distinctiveness by submitting evidence that the applied-for mark has become distinctive of applicant’s goods (“that is, proof that applicant’s extensive use and promotion of the mark has allowed consumers now directly to associate the mark with applicant as the source of the goods”), or amend the filing basis to intent to use under Section 1(b), the latter of which is what Off-White did with its pending “Product Bag” application, for which it received a notice of allowance in December.
Taken together, these trademarks – which are capable of falling within the Lanham Act’s sweeping definition of a trademark as any matter used “to identify and distinguish [one party’s] goods . . . from those manufactured or sold by others and to indicate the[ir] source” – and Off-White’s quest to amass registrations for them comes in furtherance of the brand’s practice of adopting otherwise ordinary marks (from zip ties to various arrow designs), and applying them to its graphic-centric garments and accessories as indicators of the source of the products and driving consumer appeal in connection with such marks in much the same way that luxury brands have done for decades – or in some cases, centuries.
The lawsuit that Off-White filed against Afters Ice Cream in November appears to be an interesting parody case in the making. The quick rundown of the scuffle is this: fashion/streetwear brand Off-White filed suit against California-based ice cream chain Afters, claiming that it is piggybacking on the esteem and appeal of Off-White by way of an array of “merch” offerings, namely t-shirts and sweatshirts, as well as decorative store elements that make use of Off-White’s diagonal stripe motifs and in some cases, other aspects of the well-known brand’s trademarks.
By “manufacturing, advertising, marketing, promoting, distributing, displaying, offering for sale, and/or selling products” that make use of “one or more of Off-White marks,” and affixing “confusingly similar [or] identical” signage and interior decoration to its stores and pop-up outposts, Afters is looking to “confuse consumers into believing that [its] products are Off-White products and/or that [it or its] business is affiliated with Off-White” when there are no such ties between the two companies, Virgil Abloh’s company argues in the complaint that in filed with a California federal court late last year.
Off-White points to “significant common law trademark” rights for its name and various logo marks, and five federal trademark registrations for its “fifteen alternating parallel diagonal lines of varying sizes” marks – which are mostly registered for use on garments and accessories, but one of the registrations includes use in connection with “retail store services featuring apparel, footwear, fashion and clothing accessories,” among other things – as the basis for its claims.
In its newly-filed answer, Afters sets the stage for what is to come, denying “any infringement of any valid trademark owned by [Off-White] or any involvement in any alleged infringement of any valid trademark owned by [Off-White],” while also asserting seventeen affirmative defenses, which range from lack of damages (even if it did infringe Off-White’s trademarks, Afters contends that Off-White “has not been injured or damaged as a proximate result of any act or omission for which [Afters] is responsible”) to failure to state a claim upon which relief can be granted.
Among the laundry list of affirmative defenses that Afters cites in its answer, the highly-Instagrammable ice cream chain claims that it should be shielded from liability on parody grounds. A potential defense to trademark infringement, parody has been defined as “a simple form of entertainment conveyed by juxtaposing the irreverent representation of [a] trademark with the idealized image created by the mark’s owner,” as a judge for the U.S. District Court for the Southern District of New York put it in the Louis Vuitton v. My Other Bag case, citing the U.S. Court of Appeals for the Fourth Circuit’s decision in Louis Vuitton Malletier S.A. v. Haute Diggity Dog,which was citing the 2001 decision from the Fourth Circuit in PETA v. Doughney.
In the case at hand, parody could be a relevant argument since Afters did not copy-and-paste the Off-White name and striped branding for its t-shirts and sweatshirts on its own; it has included some additional elements. For instance, instead of using the full Off-White name on one of its t-shirt styles along with the diagonal stripe square, the Afters garments read, Off-Diet, a seeming play on the calorie count of ice cream. It has taken similar light-hearted jabs at other buzzy brands – from Anti Social Social Club (its version is “Anti Diet Diet Club”) to Kanye West’s Sunday Service, complete with “Ice Cream is King” and “Sundae Service” taglines.
Aside from its parody claim, Afters argues in a separate affirmative defense that even “assuming that [it] used any trademark owned by [Off-White],” its use is permissible because Off-White’s “alleged trademarks have no secondary meaning.” In other words, Afters claims that consumers do not associate Off-White’s non-distinctive marks, including its diagonal stripe logo, with a single source, preventing them from actually functioning as trademarks. This argument clashes with Off-White’s assertion that as a result of its “use, advertising and promotion of” its various graphic marks, as well as “the word-of mouth-buzz generated by its consumers,” its products and its various trademarks are “prominently placed in the minds of the public,” thereby, giving rise to secondary meaning.
Still yet, Afters argues that Off-White’s trademark claims should be dismissed because the brand “has abandoned its rights in and to the alleged trademarks through acts,” such as “failing to adequately police and protect its allegedly protectable trademarks,” presumably referring to other uses of similar marks by third parties.
With the foregoing and other defenses in mind, Afters argues that Off-White’s complaint – and its trademark infringement, false designation of origin, and unfair competition claims – should be dismissed in its entirely, with “judgment entered against [Off-White] and in favor of [Afters].”
Given Off-White’s pattern of co-opting and registering (or in some cases, actively seeking to register) otherwise ordinary symbols as trademarks – from crosswalk-inspired diagonal lines and the use of quotation marks to stylized arrows that appear on no shortage of packaging and zip ties – pushback centering on whether relevant consumers are able to link these symbols with a single source would be somewhat unsurprising to see. Interestingly, though, despite essentially arguing by way of a few of its affirmative defenses (i.e., lack of secondary meaning, abandonment, and non-infringement, in connection with which Afters alleges that it “has not infringed any of [Off-White’s] allegedlyprotectable trademarks,” etc.) that Off-White’s marks, including its various diagonal stripe marks, do not serve as trademarks, Afters does not set out any counterclaims seeking an invalidation of the registrations that Off-White points to in its complaint for these marks.
*The case is Off-White LLC v. Afters Ice Cream, Inc., 8:20-cv-02121 (C.D.Cal.).
This year, the filing of a particular handful of retail industry lawsuits and the continuation of previously-filed ones stood out in the crowded landscape of litigation. These included suits that see luxury titans and/or other industry giants seeking to preserve their places at the top of the retail totem pole, particularly in light of consumers’ increased reliance on the evolving e-commerce market. The rise of e-commerce and especially, marketplace models, over the past decade has caused brands lose some of the near-exclusive control that they once had over the terms of the distribution and sale for their products in the past.
This trend has seemingly resulted in lawsuits over distribution in the European Union, including the cases initiated in recent years by the likes of Nike, with the Amsterdam Court of Appeal holding this summer that sportswear giant (and others) may legally ban third-parties from selling its footwear on unapproved online marketplaces. The outcome in the Action Sports v. Nike European Operations Netherlands BV follows from the Court of Justice of the European Union’s 2017 decision that Coty, Inc. and other luxury goods purveyors can ban sales by authorized retailers on third-party online marketplaces in order to “preserve the luxury image of the goods” at issue.
This quest for control has also seen luxury goods brands, such as Chanel, take on domestic resellers like The RealReal and What Goes Around Comes Around over their sale of allegedly counterfeit and/or otherwise infringing goods, for example, while companies, including Rolex, Swatch subsidiary Hamilton Watch, and Ralph Lauren, have instituted trademark-centric lawsuits over originally-authentic but modified goods.
Faced with the disruptions that come with the influx of new competitors, including in the e-commerce space, luxury consultant Robert Burke told the AP early this year that brands are working hard “to control their future as they watch their products get discounted on resale sites” and/or more widely distributed alongside non-luxury goods by way of sites like Amazon. This new reality – and the lawsuits that have come with it – is a reflection of how significantly digitally-native companies and third-party marketplaces have disrupted the former status quo that brands once enjoyed that enabled them to control almost exactly how and where their products were sold, and at what prices.
Here is a look at some of the most noteworthy domestic lawsuits of 2020 …
1. Appeals Court Sides with Costco in $21 Million Fight Over “Counterfeit” Tiffany Rings
The U.S. Court of Appeals for the Second Circuit sided with Costco in the years-long legal battle that ensnared it with Tiffany & Co. In a highly-anticipated decision dated August 17, a 3-judge panel for the Second Circuit held that the U.S. District Court for the Southern District of New York erred in determining on summary judgment that the multi-national warehouse retailer ran afoul of federal trademark law by labeling and selling diamond engagement rings as “Tiffany” rings, and ultimately, requiring Costco to pay a jury-determined $21 million damages sum as a result.
In the 3-0 decision, Circuit Judge Debra Ann Livingston stated that the lower court was wrong to grant Tiffany’s motion for summary judgment, and thereby, prevent a jury from deciding key issues at the conclusion of a trial.
Tiffany & Co. first filed suit against Costco on February 14, 2013, accusing it of trademark infringement, counterfeiting, and unfair business practices, and seeking tens of millions of dollars in damages. According to Tiffany’s complaint, Issaquah, Washington-headquartered Costco had sold engagement rings – some costing upwards of $6,000 – using the “Tiffany” name to thousands of Costco members, who snatched up the sparklers (allegedly) under the false impression that they were authentic Tiffany products. Costco responded with a countersuit, in which it denied infringement/counterfeiting liability, asserted defenses – including fair use – on its behalf, and sought to have Tiffany & Co.’s federally registered “Tiffany” mark invalidated on the basis that it is generic.
2. Valentino v. Mario Valentino: What is Really at Stake?
Mario Valentino is “the real VALENTINO.” That is what the Italian accessories brand assert3e in the latest round of the case waged against it by the larger and more famous Valentino S.p.A. (“Valentino”). For more than a year now, the two Valentinos have been going back and forth in a legal squabble that got its start when Valentino filed suit, arguing that Mario Valentino is blatantly breaching the co-existence agreement that the two brands entered into in 1979 in an effort to avoid legal complications stemming from their nearly-identical names and similar offerings.
In accordance with the legally-binding agreement, Mario Valentino can use the “Valentino” name on leather goods, such as handbags, assuming it includes the full “Mario Valentino” name on the inside of the product. As such, Valentino – the undoubtedly bigger, mightier brand and the undisputed fashion force in the squabble at hand – lacks the legal ability to use its “Valentino” name on some of the most important products in its lineup, the very goods that it sells the most of.
While this has not stopped Valentino from building a big business out of leather goods and footwear, the brand’s inability to simply use the “Valentino” name on its own (i.e., without “Garavani” or “Couture”) in connection with certain categories of goods could have significant implications for the value of the brand, itself. This is particularly relevant given that much of the value of a fashion company – or any consumer-facing company for that matter – is intrinsically tied to its branding and the intellectual property rights that come with that. With that ind mind, this could prove to be a high-stakes battle.
In the latest round of the case, Mario Valentino argued that the Mayhoola for Investments-owned Valentino is “exert[ing] its massively superior financial position to use protracted, expensive litigation to crush MV” because its “senior trademark registrations for the MV trademarks presented an obstacle to [Valentino’s] growth in the leather handbag marketplace.”
3. One of Nike’s Most Iconic Sneakers is at the Heart of a New Lawsuit
In a swiftly-settled but closely-watched case in the sneaker world, Nike filed suit against Warren Lotas in October shortly after the streetwear brand garnered attention by revealing that it had teamed up with noted Nike collaborator Jeff Staple for what both parties characterized as a “reinterpretation” of the cult-classic shoe that is said to have “catapulted sneaker culture to the masses” when Staple released it with Nike back in February 2005 to intense fanfare and what has since been characterized as a full-blown “riot.” Consisting of Nike’s classic Dunk silhouette and adorned with a stylized version of the Beaverton-based titan’s swoosh on the side, the $300 Staple Pigeon x Warren Lotas Reinterpreted OG Shoes quickly led to litigation.
Setting forth claims of trademark infringement and dilution, Nike asserted that it was not in any way involved in the reintroduction of the lookalike sneakers – including the Warren Lotas X Staple Pigeon OG, as well as “the Warren Lotas Freddy Broccolini Chanclas, the Warren Lotas Toxic Green, [and] the Warren Lotas Jason Voorhees Dunk Low” styles – and did not authorized Lotas’ pre-sale offering or release of them.
Nike’s suit heated up shortly after its filing, with the sportswear giant seeking preliminary injunctive relief to bar Lotas from offering up and/or distributing any of the infringing sneakers, including a “replacement” pair, and Lotas responded with claims of its own before counsel for the Beaverton, Oregon-headquartered sportswear giant and the Los Angeles-based streetwear brand told the court this month that they “entered into a confidential settlement agreement that calls for final resolution of this dispute.”
4. Chanel’s Ongoing Legal Fights Against Resellers
2020 brought the continuation of the trademark-centric lawsuits that Chanel filed against two prominent resellers: The RealReal (“TRR”) and What Goes Around Comes Around (“WGACA”) in what the resale companies have consistently characterized as a “bad faith” quest by the French fashion house to stomp out the market for pre-owned Chanel products. In one of the most recent developments in the Chanel v. TRR case, TRR argued that Chanel is actively engaging in an “overarching anticompetitive scheme” in order to limit the supply of its products in the market, “inhibit the growth and development of competitors, and artificially raise and maintain [its] prices,” and it has had help from prominent publications and big-name luxury fashion retailers in doing so. Chanel has since argued in response that TRR has failed to adequately show that Chanel actually monopolized – or attempted to monopolize – the market, and that its tortious interference claims are either time-barred or without merit.
Meanwhile, one of the most interesting arguments in the Chanel v. WGACA case to date centers on the issue of what constitutes counterfeiting and/or infringement, or more specifically, whether bags made in an authorized Chanel factory but that not “were never received by Chanel for quality control and approval” run afoul of the law. And beyond that, whether WGACA’s practice of “sprucing up” otherwise genuine Chanel bags impacts their status as authentic goods.
5. Burberry is Suing Rapper “Burberry Jesus” for Trademark Infringement, Dilution
A Chicago-based rapper has landed on the receiving end of a lawsuit from Burberry over his stage name and various elements of his branding, which the 164-year old British fashion company claims infringe its world-famous trademarks. According to the complaint that it filed in an Illinois federal court late last month, Burberry asserts that Marvel Yarbrough – a musical artist using the name “Burberry Jesus” – is engaging in “willful trademark infringement and dilution of the famous BURBERRY trademarks, as well as copyright infringement of Burberry’s copyright-protected design.”
According to suit, Burberry alleges that Yarbrough “adopted ‘Burberry Jesus’ as his stage name – which he often shortens to ‘Burberry’ – with an intent to replicate the Burberry brand and copy its well-known trademarks that have been used exclusively and continuously by Burberry and its authorized licensees for more than 160 years.” Yarbrough “uses the fame and renown of the BURBERRY trademark for his own personal gain,” the fashion brand claims, as well as “to promote his music, garner media attention, grow a fan base, and unfairly trade off of Burberry’s goodwill, all to Burberry’s detriment.”
The interesting – albeit legally unimportant (from a trademark infringement defense perspective) – twist: ten days after Burberry sent its first cease-and-desist letter to him, Yarbrough went so far as to “surreptitiously file a request in the Circuit Court of Cook County to improperly change his legal name from Marvel Yarbrough to Burberry Jesus,” presumably in an ill-advised attempt to avoid liability.
6. Off-White is Suing an Ice Cream Chain Over Allegedly Infringing Merch and Store Décor
Off-White is suing a California ice cream chain, arguing that the unrelated party has run afoul of the law by selling products that bear – and adorning its outposts with – marks that are “confusingly similar” to Off-White’s own well-known trademarks. In the complaint that it filed in a California federal court in early November, Off-White claims that Afters Ice Cream is offering up merch and using “retail fixtures, signage, [and] interior décor” that is meant to “confuse consumers into believing that [its] products are Off-White products and/or that [it or its] business is affiliated with Off-White” when there are no such ties between the two companies.
“The Off-White brand has been recognized for its distinctive graphic and logo-heavy apparel designs, including a unique design mark comprised of alternating parallel diagonal lines, which has been used on or in connection with Off-White products since at least as early as 2013,” Off-White asserts in its complaint. As a result of its “use, advertising and promotion of” its graphic marks, including the aforementioned multi-diagonal stripe mark, as well as “the word-of mouth-buzz generated by its consumers,” Off-White alleges that its products and its various trademarks are “prominently placed in the minds of the public.”
According to Off-White, Afters is piggybacking on the esteem and appeal of its brand by way of an array of “merch” offerings, namely t-shirts and sweatshirts, and decorative store elements that make use of diagonal stripe motifs and in some cases, other aspects of Off-White’s trademarks.
7. Amazon Takes on Counterfeiters in a Number of New Lawsuits
This year, Amazon took to cracking down on the sale of counterfeits on its platform by way of a handful of new lawsuits. The Seattle-based e-commerce giant first teamed up with Valentino to wage a legal battle centering on the sale of fakes on its sprawling third-party marketplace platform. In the trademark infringement, counterfeiting, and patent infringement complaint that they filed in a federal court in Washington in June, Amazon and Valentino allege that defendants Kaitlyn Pan Group, LLC and Hao Pan “introduced a line of shoes” on Amazon that blatantly copies “the iconic look and design of Valentino Garavani Rockstud shoes,” and makes use of one of Valentino trademarks, thereby, “infringing Valentino’s trademark rights and design patents.”
Shortly thereafter, Amazon partnered with another brand, KF Beauty, to file a joint trademark action against a group of defendants, including Sirowl Technology, for allegedly “conspiring and operating in concert with each other to … advertise, market, offer, and sell counterfeit products as genuine WUNDER2 products to Amazon,” thereby, running afoul of KF Beauty’s federally registered trademarks.”
And still yet, Amazon made headlines in November when it filed suit against two influencers and nearly a dozen Amazon third-party sellers over an alleged scheme to peddle fakes under the radar of its increasingly robust anti-counterfeiting controls. According to the complaint that it filed with the U.S. District Court for the Western District of Washington on November 12, Amazon claims that influencers Kelly Fitzpatrick and Sabrina Kelly-Krejci, along with 11 Amazon marketplace sellers, are on the hook for the “unlawful and expressly prohibited advertisement, promotion, and/or sale of counterfeit luxury products on Amazon.com” in violation of Amazon’s policies, and federal and state law.
8. Coty is Being Sued for Allegedly Overpaying for “Inflated” Kylie Cosmetics, Deceiving Shareholders
In May 2020, almost two years after Forbes crowned Kylie Jenner the “youngest-ever self-made billionaire,” the business magazine had another story to tell: Jenner and her team had been “inflating the size and success of her [Kylie Cosmetics] business for years.” The article – which is still live on Forbes’ website sans any corrections or retractions – proved to be an internet sensation in much the same way as Jenner’s initial “Billionaires” cover. But beyond proving inherently clickable and share-able, the article prompted the filing of a lawsuit accusing Coty and a handful of its highly-ranking officers and directors of running afoul of U.S. federal securities laws in connection with the acquisition of Kylie Jenner’s cosmetics collection.
In a proposed class action lawsuit filed in a New York federal court on September 4, Coty shareholder Crystal Garrett-Evans argues that the defendants engaged in “a fraudulent scheme and course of business that operated [to deceive] purchasers of Coty shares by disseminating materially false and/or misleading statements and/or concealing material adverse facts … about Coty’s business, operations, and prospects.”
9. Playboy is Suing Fashion Nova Over its Lookalike Bunny Halloween Costumes
After being sued last year by Versace over a Halloween costume that looked a lot like the jungle print dress that Jennifer Lopez wore to the Grammys in 2000, Fashion Nova was on the receiving end of a similar lawsuit this year – albeit over different Halloween costumes. This time around, Playboy is suing Fashion Nova over certain bunny costumes that it says the Southern California-based fast fashion company has marketed and sold in an attempt to “piggyback off of the popularity and renown of Playboy’s iconic Bunny Costume®, which Playboy has cultivated for more than six decades.”
In the trademark infringement and dilution complaint that it filed in the U.S. District Court for the Central District of California on October 28, Playboy asserts that “throughout the peak of the Halloween costume season,” Fashion Nova has been “prominently featuring” and selling costumes that look a bit too much like its trade dress-protected bunny costume, including the “iconic bunny ears, tail, ribbon name tag, wrist cuffs, corset, and bowtie collar.” (Playboy’s various enduring registrations for the costume specifically list the trade dress as consisting of “a three dimensional bunny costume worn by a woman,” which “includes a corseted bodice, bunny ears worn on the head, a bunny tail on the back of the bodice, a name tag on the front of the bodice, wrist cuffs and a bow tie collar.”)
10. In the Fight Against Modified Luxury Goods, Vortic’s Win is Telling
Issuing her findings of fact and conclusions of law, Judge Nathan sided with Vortic on the basis that “the product at issue” – a restored and modified watch consisting of original Hamilton parts and parts produced by Vortic, itself, and which bore the branding of the original Hamilton watch – “was unlikely to cause confusion.” Why are consumers unlikely to be confused as to the source or Hamilton’s association with the modified Vortic watch? According to the court, “Vortic’s advertisements and marketing materials, as well as the watch itself, provided full disclosure” in accordance with the standard set out in the Supreme Court’s 1947 decision in Champion Spark Plug Co. v. Sanders.
11. Boohoo, Nasty Gal, PrettyLittleThing Face “Deceptive Pricing,” Fraud Suits
Over the course of a few weeks this spring, Boohoo, Nasty Gal, and PrettyLittleThing were each individually sued and accused of fraud for allegedly inflating the original prices of their fast fashion wares in order to “deceive customers into a false belief that the sale prices [that they advertise on their e-commerce sites] are deeply discounted bargain prices.” Plaintiffs Farid Khan, Haya Hilton, and Olivia Lee argued in their respective complaints that the Boohoo Group brands are actively engaging in a “scam” to “lure unsuspecting customers into jumping at a fake ‘bargain.’”
In the first of such suits, all of which were filed in the U.S. District Court for the Central District of California, Khan claimed that “on a typical day, Boohoo prominently displays on its landing page some form of a sale where all products or a select grouping of products are supposedly marked down by a specified percentage—for example, 40, 50, or 60% off.” The problem with that, he asserted, is that such a “sale” is “not really a sale at all” and that “all the reference prices on Boohoo’s website are fake” since the retailer never offered up the garments at issue for their original, pre-sale prices.
In response to the three lawsuits, the Boohoo Group defendants – which generated $1.55 billion in revenue in 2019 with their trendy and cheap wares – filed a combined motion, seeking to have the cases dismissed in their entirety, or at least, to have an array of the plaintiffs’ claims struck down. The defendants argue that despite claiming that they “fell victim to the deception” of the retailers’ various sale events, they do not allege any tangible harm. Khan, for instance, claims that he was duped by Boohoo’s “50% Off Everything” advertising, but “does not allege that he is out-of-pocket anything, e.g., that his $6 t- shirts were worth less than the rock-bottom price he paid for them.” With that in mind, Boohoo and co. argue that the plaintiffs lack standing to bring their suits since “they do not plausibly allege that they suffered any damages, i.e., that the price they paid was more than the value received.”
12. The RealReal Directors, Execs. Sued for Allegedly Misleading Investors About Authentication Process
Since getting its start in 2011, the message from The RealReal has been simple: all of the pre-owned luxury goods it offers up are 100 percent authentic. In furtherance of its title as the world’s largest online marketplace for authentic luxury goods, the San Francisco-based company boasts what it calls “the most rigorous authentication process in the marketplace” for the pre-owned luxury goods it sells, making it “the only resale company in the world that authenticates every single item it sells.” In short: thanks to its “multi-point authentication process,” every product offered up on its e-commerce site and in its brick-and-mortar outposts is the real thing.
Those are the virtues that have enabled TRR and its sweeping selection of Chanel bags, Celine wares, and (relatively) hard-to-come-by Hermes Birkin bags to find fans in a growing –and often dedicated –pool of brands and consumers, alike, and nab a valuation of $1.6 billion when it first listed on NASDAQ in late June 2019, raking in $300 million in funding to fuel further growth. Those very same virtues are now coming under fire, as one of the company’s shareholders is calling foul by way of a strongly-worded shareholder derivative lawsuit.
In the complaint that she filed in a Delaware federal court on September 10, TRR shareholder Iwona Grzelak claims that a number (but not all) of the company’s individual Board members – from founder Julie Wainwright to PVH Corporation president Stefan Larsson – and executives like Chief Financial Officer Matt Gustke and Chief Accounting Officer Steve Lo intentionally or recklessly breached their fiduciary duties as directors and/or officers, and violated the U.S. Securities Exchange Act in the process.
The parties have since agreed to a temporary stay of the case because Grzelak’s lawsuit “challenges substantially similar alleged conduct and involves substantially similar questions of law and fact as alleged in the federal securities action” that The RealReal shareholder Michael Sanders filed in November 2019, in which he accused the company and its initial public offering (“IPO”) underwriters, of misleading investors about the nature of it authentication process.
