A Chinese court has handed Christian Louboutin a win in battle over its red sole trademark. In a decision dated September 9, the Beijing Intellectual Property Court determined that defendant Guangdong Wanlima Industrial Co., Ltd. – a Shenzhen Stock Exchange-listed company in the business of designing, researching, production, manufacturing, and marketing leather products – ran afoul of China’s Anti-Unfair Competition Law by intentionally and “maliciously” offering up high-heel footwear bearing a red sole that mirrored the design and the well-known red sole of Louboutin’s shoes, thereby, giving rise to the chance that consumers will be confused as to the source of the shoes and/or their connection to Louboutin. 

Setting the stage in its recently-released decision, the Beijing IP Court stated that Louboutin filed suit against Guangdong Wanlima Industrial Co., Ltd. (“Wanlima”), pointing primarily to the Guangzhou-based company’s sale of a variety of women’s shoes with “the same or similar trade names and red sole decoration” as its own red-soled stilettos by way of its official flagship store on Alibaba’s Tmall, as well as at New World Department Stores. The defendant’s sale of the lookalike footwear is particularly problematic in light of the “high reputation” of its red-soled shoes “in China and around the world,” Louboutin argued, alleging that its footwear – and its red sole trademark – is “well known to the relevant public,” and as a result, Wanlima had violated Article 6(1) of China’s Anti-Unfair Competition Law. 

Article 6(1) of the Anti-Unfair Competition Law of China (2019 Amendment), which prohibits parties from offering up products that are confusingly similar to those of others, including by way of “a label [that is] identical or similar to the name, packaging or decoration … with certain influence.” 

Siding with Louboutin, the Beijing IP Court held in a first-instance judgment that based on evidence submitted by the French brand, its red soled shoes and its red sole “decoration” amount to trademarks with “a certain influence.” Specifically, the court held that Louboutin submitted evidence showing that it has “actually sold footwear products in mainland China since 2011,” with a sales volume of more than RMB 900 million ($129.9 million) for its footwear, as well as evidence of third-party media coverage of its red-soled shoes from “many well-known media across [China], covering many parts of the country.”

This evidence was “sufficient to prove that [Louboutin’s] ‘red sole shoes’ product and red sole decoration have a high market reputation, have established solid connections with the relevant public, and have the distinctive feature of distinguishing the source of the product,” the court held. As a result, Louboutin’s “red soled shoes” trademark and the decoration with the sole color meet the “certain influence” bar set out by Article 6(1) of the Anti-Unfair Competition Law, according to the court, making Wanlima’s use of “the same or similar logos with the trade name of ‘red sole shoes’ and the decoration of red soles” a violation of the law. 

With the foregoing in mind, the Beijing IP Court issued an injunction in Louboutin’s favor, requiring Wanlima to immediately and permanently cease its sales of red-soled footwear and to pay Louboutin damages to RMB 5 million ($721,855) and legal expenses of RMB 445,000 ($64,245). 

One of Wanlima's shoes that infringes Louboutin's red sole trademark
One of Wanlima’s red sole shoe styles

Louboutin’s win follows from a 2020 victory when the Supreme People’s Court of China ruled in favor of the brand. Confirming a decision from Beijing Higher People’s Court, which overturned an earlier determination of the Chinese National Intellectual Property Administration, the Supreme People’s Court held that even though single color marks are among the types of marks that are listed as protectable under Article 8 of the Chinese Trademark (which explicitly lists “combinations of colors” as eligible for registration), Louboutin’s red sole still amounts to a protectable mark. In that case, Supreme People’s Court was swayed by Louboutin’s submission of evidence showing that its red sole had acquired distinctiveness in the minds of Chinese consumers.

As the Beijing Higher People’s Court determined – and the Supreme People’s Court subsequently affirmed, Louboutin’s use of a single color on the soles of its shoes “is not excluded by the law from being registered as a trademark,” as long as the consuming public has come to associate the red shoe sole with a single source, something that Louboutin can establish by showing that it has been using the mark on goods in China for a while, that it has advertised its mark there, and consumers have, in fact, come to associated the red sole with a single source (which can be established by way of consumer surveys).

The court’s decision in the earlier case “opened a door for business owners to pursue trademark registration protection of non-traditional trademarks with sufficient distinctiveness,” Steve Zhao and Pei Lyu of the Beijing-based AnJie Law Firm stated at the time. 

The more recent outcome is the latest in a line of trademark and unfair competition cases (including one involving the shape of Chanel’s No. 5 fragrance bottle) that are resulting in wins for non-native brands, and thus, are proving to be beneficial not only for Louboutin but other brands, as well. Unfair competition cases, for one thing, are becoming “a valuable enforcement method for foreign companies to enforce intellectual property rights in China” – both when they have trademark registrations to point to (as Louboutin does) and also “when trademarks are unavailable, such as in the earlier New Balance/Barlun case,” according to Aaron Wininger, the director of Schwegman Lundberg & Woessner’s China Intellectual Property Practice.

As we noted in connection with the outcome in the Manolo Blahnik trademark case, which saw the Supreme People’s Court of China invalidate a China-based individual’s bad faith trademark registration targeting the famous footwear brand in July (a decision that is likely to pave the way for Blahnik to engage in a major expansion effort on the Chinese mainland), the Chinese National Intellectual Property Administration and Chinese courts at various levels, alike, are increasingly dealing wins for non-native brands that have become especially well known in other markets.  

The result is likely to be increased confidence and investment in the Chinese market by Western brands, particularly as China continues to be a hot bed for luxury goods sales (even if it is currently being plagued by the impact of COVID lockdowns). Sales of personal luxury goods in mainland China grew by 36 percent year-over-year in 2021 to 471 billion yuan ($73.6 billion), keeping the country on track to nab the title of the world’s largest luxury goods market by 2025. Mainland China’s share of the global luxury market was up about 21 percent last year, according to Bain, whose analysts said early this year that they anticipate such growth to continue. 

Nike and John Geiger Collection have settled a trademark lawsuit over “copycat” footwear. In a motion lodged with the U.S. District Court for the Central District of California on Tuesday, the parties are seeking the court’s approval of a consent judgment and motion for permanent injunction regarding Nike’s trademark infringement and dilution claims against John Geiger Collection, which stem from its sale of its signature GF-01 sneakers, and the Los Angeles-based footwear brand’s declaratory judgment counterclaims against Nike, in which it sought to have Nike’s Air Force 1 (“AF1”) trademark registrations invalidated on the basis that the AF1 trade dress consists of “functional features.”  

Setting the stage in the proposed consent judgment and permanent injunction, Nike and John Geiger Collection (“JGC”) do away with Geiger’s counterclaims, which will be dismissed with prejudice, as “JGC stipulates, agrees, and acknowledges that Nike is the exclusive owner of the following registered trademarks and all related common law rights: U.S. Trademark Registration Nos. 3,451,905; 3,451,907; and 5,820,374,” which cover Nike’s AF1 designs, and JGC “stipulates, agrees, and acknowledges that [these] marks are valid and enforceable.” (JGC previously argued that Nike lacks rights in the AF1 marks, as elements of the marks are “essential to the use and purpose of the sneaker and/or affect the cost, quality, performance, durability, and safety of the sneaker,” making them functional and ineligible for protection. The company also alleged that Nike has failed to police unauthorized uses of its AF1 marks, thereby causing them “to cease functioning as a symbol of quality and a controlled source.”)

Turning to the claims that Nike made against Geiger in furtherance of its lawsuit, the parties state that a judgment should be entered against JGC “on all of Nike’s counts in the First Supplemental First Amended Complaint” – trademark infringement, false designation of origin, contributory trademark dilution, and unfair competition – “because JGC, although without intent, infringed [Nike’s] asserted marks by having manufactured, using, transporting, promoting, importing, advertising, publicizing, distributing, offering for sale, and/or selling [a long list of the GF-01] products.” (While JGC has seemingly traded an infringement judgment (and other things) in exchange for Nike dropping its claims, there is certainly some room for discussion about likelihood of confusion and thus, infringement, here.)

Nike sneaker and John Geiger sneaker

As for what will happen to any remaining inventory that JGC has of the “infringing” GF-01 sneakers, the agreement enables the company to sell-off its “existing inventory […]  up to and through May 31, 2023,” and after that point, the company is required to “destroy within 14 days any remaining inventory of infringing products.” 

As part of the settlement, Nike has also garnered itself a permanent injunction (subject to court approval), which places strict limits on what JGC and any parties acting in concert with it cannot do with regards to Nike’s trademarks, this includes a permanent bar against “manufacturing, transporting, promoting, importing, advertising, publicizing, distributing, offering for sale, or selling any products … under the asserted [AF1] marks or any other [Nike] marks” that are likely to confuse consumers into believing that any JGC products “or any of JGC’s commercial activities are sponsored or licensed by Nike, are authorized by Nike, or are connected or affiliated in some way with Nike.” 

Beyond that, JGC cannot imply that it has “Nike’s approval, endorsement, or sponsorship of, or affiliation or connection with, JGC’s products, services, or commercial activities, pass off [its] business as that of Nike, or engag[e] in any act or series of acts … [that] constitute unfair methods of competition with Nike and from otherwise interfering with or injuring the asserted marks or the goodwill associated” with those mark, among other things.

The filing follows from a win for Nike early this year when Judge Mark Scarsi of the U.S. District Court for the Central District of California refused to dismiss the Beaverton-based sportswear giant’s claims against JGC, who accused the brand of attempting to “capitalize on the strength and fame of Nike and its Air Force 1 (“AF1”) by making, promoting, advertising, marketing, and selling footwear bearing the AF1 trade dress and/or confusingly similar trade dress,” albeit without Nike’s involvement or authorization, among other things. (More about that here.)

Nike sneakers and John Geiger sneakers

A statement published on Geiger’s Twitter on Tuesday states, “Nike and John Geiger have resolved the lawsuit related to Nike’s Air Force 1 trade dress and John Geiger’s footwear products, specifically his GF-01 Shoes. The lawsuit has been resolved through an amicable resolution that includes a consent judgment. As part of the resolution, John Geiger has agreed to modify the design of his GF-01 shoes. Nike respects John Geiger as a designer and other designers like him, and both parties are pleased to resolve this dispute in a way that allows John Geiger to continue building his brand while also respecting Nike’s intellectual property rights in its iconic Air Force 1 trade dress”

Customizations, Unauthorized NFTs 

Nike’s lawsuit, which started as an action against Warren Lotas’ footwear manufacturer La La Land Production & Design and subsequently added Jian Geiger as a defendant, comes as part of an enduring push by the sportswear giant to “hold accountable all bad actors” that “wrongfully trade off of Nike’s famous brand and dupe consumers into purchasing fake Nike products.” In addition to this case, Nike has filed a number of trademark-centric lawsuits against entities and individuals that it alleged were looking to build businesses on the back of its famous branding. After filing a headline-making suit against MSCHF in the wake of backlash over the Brooklyn-based company’s sale of customized (read: blood-infused) Air Max sneakers, Nike filed suit against a former employee that was customizing – and selling – initially-authentic Nike sneakers without its authorization. That case has since settled. 

Around the same time, Nike initiated a trademark suit against Drip Creationz, which has allegedly offered up unabashedly counterfeit AF1 sneakers, which it advertises as “100% authentic,” while also promoting and selling unauthorized footwear that it markets as handmade “customizations” of Nike’s most iconic products. That case is currently underway in federal court in California, with Nike recently amending its complaint to add new defendants to the lineup. 

And most recently, Nike has taken its trademark enforcement virtual, filing suit against StockX on the basis that the marketplace has allegedly offered up NFTs that amount to “unsanctioned products [that] are likely to confuse consumers, create a false association between those products and Nike, and dilute Nike’s famous trademarks.” 

The case is Nike, Inc. v. La La Land Production & Design, Inc., 2:21-cv-00443 (C.D. Cal.)

Roughly 100 years after it was first released, Chanel is seeking to register the shape of the bottle its No. 5 fragrance as a trademark in the U.S. – and is facing some (unsurprising) preliminary pushback in doing so. On the heels of filing an application with the U.S. Patent and Trademark Office late last year for a trademark that consists of “a rectangular shaped container with beveled sides, a thinner neck and on top a horizontal rectangular faceted shape” for use on “cosmetics; fragrances and perfumery,” an examining attorney for the trademark office has refused to register the mark, stating that the applied-for mark is not inherently distinctive because “the shape of the perfume bottle and the bottle stopper is a basic shape that is common in the fields of cosmetics, fragrances, [and] perfumery.”

Specifically, USPTO examining attorney Sabrina Tomlinson stated in a non-final Office action on August 15 that registration for the blank bottle design is refused (for now) because “the mark consists of a nondistinctive configuration of packaging for the goods that is not registrable on the Principal Register without sufficient proof of acquired distinctiveness.” Tomlinson asserted in the Office action that the bottle is “a common rectangular shaped container with beveled sides that is meant to be filled with perfume,” pointing to examples of “large, well-known retailers,” such as Macy’s, Sephora, and Ulta, that carry “many comparable and well-known cosmetics and perfumery brands that use the same rectangular shaped container with beveled sides as the base of the perfume bottle.” 

“The shape is a common or basic shape that is not unique or unusual in the fields of cosmetics, fragrances, perfumery, and eau de parfum,” per Tomlinson, who notes that “although the simple rectangular shape of a perfume bottle container is relatively ubiquitous for perfume bottle shapes, the beveled sides of applicant’s configuration do not establish distinctiveness because it is a mere refinement of a commonly-adopted and well-known rectangle shape for perfume bottles that is regularly viewed by the public as the standard form for perfume bottles.” 

A screenshot from Chanel's website
The specimen submitted by Chanel

She further asserts that the mark is “incapable of creating a commercial impression because [Chanel] has no distinctive accompanying words with the rectangular shaped perfume bottle container,” and so, “without additional and specific evidence of acquired distinctiveness, the applied-for configuration mark must be refused registration.” 

Given that “the entire applied-for mark must be analyzed,” Tomlinson turns her attention to the “horizontal, rectangular faceted bottle stopper,” which Chanel claims as part of the mark. While Chanel’s bottle stopper is “faceted like a gemstone, like the bottle stoppers from Tory Burch, Versace, Kayali, and Tiffany & Co.,” it is still just a “mere refinement of a commonly-adopted and well-known horizontal, rectangular bottle stopper shape for perfume bottles that is regularly viewed by the public as a standard form of perfume bottle tops or stoppers.” As such, Tomlinson contends that without specific evidence of acquired distinctiveness, the top portion of the applied-for configuration mark must also be refused registration.

Against this background (and given that this is a non-final action), Tomlinson states that Chanel may respond by providing evidence of acquired distinctiveness in the form of “verified statements of long-term use, advertising and sales expenditures, examples of advertising, affidavits and declarations of consumers, and customer surveys. (She is also requesting that Chanel provide additional information about the mark, including (but not limited to) “a written explanation and any evidence as to whether there are alternative designs available for the feature(s) embodied in the applied-for mark, and whether such alternative designs are equally efficient and/or competitive.”)

Proving secondary meaning should not be difficult for Chanel in some regards, as it has consistently made use of the bottle in its latest form since 2012. More fundamentally, Chanel No. 5, itself, is considered one of the world’s most famous and “top-selling perfumes,” according to the FT, “paving the way for the house’s broader fragrance and beauty division, which today accounts for around one third of the house’s $12.27 billion [in] annual revenue.” At the same time, the famed fashion brand has extensively advertised the fragrance – packaging, included – by way of ad campaigns. To put its No. 5-specific ad spend into perspective, Chanel reportedly spent an estimated $17 million on a commercial and print ad for Chanel No. 5 featuring Brad Pitt back in 2012 and is said to have shelled out as much as £18 million on a two-minute commercial for the fragrance starring Nicole Kidman in 2004.

Also on Chanel’s side: It has already been able to convince the USPTO to register the shape of the bottle (and has since enforced that mark via infringement litigation). The registration, which was initially registered in 2000 for use on perfume in Class 3, was renewed in 2020.

Chanel fragrance bottles

While “few fragrances – or objects, for that matter – carry as much symbolism as Chanel No 5,” Vivienne Becker wrote for the FT last year, one place where the brand could potentially face issues is whether consumers link the shape of the bottle, on its own, with a single source. After all, Chanel does not appear to use the bottle on its own, i.e., without some other forms of Chanel branding, such as the Chanel word mark, No. 5 mark, or its interlocking “C” logo. That is not likely to be an issue now, as Chanel and other brands have been able to register the shape of their perfume bottles sans any other branding elements.

Chanel, for one, boasts a U.S. registration for its cylindrically-shaped Chance fragrance bottle – sans any other branding elements, and Beaute Prestige International maintains a registration for the shape of a Narciso Rodriguez perfume bottle, which it describes as “a distinctively designed perfume bottle which comprises a unitary combination of a colored interior and a T-shaped top of the same color, to create the impression of a bottle within a bottle” – just to name a couple of examples. (These registrations are distinct from – and potentially much broader than – registrations that Saint Laurent, for example, has amassed for its Opium fragrance bottle, in which the mark is described as “the configuration of a distinctive fragrance bottle made from colored glass, and the atomizer and cap therefor,” including the use of “the wording ‘OPIUM’ and ‘YVES SAINT LAURENT.’”)

The existence of USPTO registrations – which Chanel will almost certainly amass for its No. 5 bottle (which is already has rights in) – does not, however, mean that these blank-bottle marks could not come under fire in the event that the brand attempts to enforce its mark against an alleged infringer, who could argue (in an attempt to escape infringement liability) that the brand does not actually enjoy such expansive rights, as it exclusively makes use of the bottle with its name on it, making it so that consumers do not link the bottle shape, on its own, to a single source. 

Chanel’s application for registration for the No. 5 bottle shape comes as the company is also seeking a registration for the number 5 for use on cosmetics in furtherance of a larger trend of brands seemingly looking to bolster their rights in – or better yet, their registrations for – some of their most famous indicators of source. 

A lawsuit over metaverse avatars is set to play out in the “real” world, with Roblox accusing toy company WowWee Group Limited of copying its “wildly successful avatar intellectual property to create and sell a line of physical dolls to exploit Roblox’s investment, creative efforts, and popularity in the marketplace for their own profit.” According to the complaint that it filed in a federal court in California on August 2, Roblox alleges that WowWee Group Limited – and a number of other defendants – (collectively “WowWee”) are on the hook for copyright and trademark infringement, intentional interference with contractual relations, and breach of contract, among other causes of action, for “reproducing Roblox’s avatars as a line of toys, marketing them in connection with a Roblox experience, and misleading consumers into believing that these actions were sanctioned by Roblox.” 

Setting the stage in the newly-filed complaint, Roblox asserts that over the past two decades, it has developed “one of the top online platforms for games and other experiences.” At the “core” of its appeal, the San Mateo, California-based company claims are its “distinctive and copyrighted characters, or ‘avatars,’ which are the digital manifestations of the millions of users who visit the Roblox Platform every day.” Roblox claims that it “encourages users and creators to modify and engage with its creations and intellectual property on the Roblox Platform,” including its avatars – which it describes as “humanoid figures with cylindrical heads, C-shaped hands, block-shaped bodies and legs, square or rounded arms, and cartoon-like facial expressions.” 

At the same time, however, the popular metaverse platform requires users to agree that “absent express permission from Roblox, they will not make use of certain Roblox content outside the Platform, monetize that content for their own purposes, or imply an association with or sponsorship by Roblox for their offline businesses.” These controls are “necessary,” according to Roblox, in order to protect its “brand, content, and intellectual property, which are at the center of Roblox’s success,” and to protect “the significant investments that Roblox has made to create content, such as Classic Avatars.” 

Roblox Lawsuit

Against this background, Roblox alleges in its new lawsuit that Montreal-headquartered toy-maker WowWee “saw a chance for a quick buck and decided to make toy copies of Roblox’s avatars” by way of physical dolls it dubbed “My Avastars.” Not content to “simply infringe Roblox’s copyrights in its avatars,” Roblox claims that “WowWee also wanted to exploit the experiences on Roblox’s Platform for its own benefit, [and] to accomplish that goal, WowWee induced one of Roblox’s top experience developers, Gamefam, to partner with it so WowWee’s infringing My Avastars dolls could be paired with a Roblox Platform experience – My Avastars: RP.”

Roblox asserts that WowWee paired its dolls with “a Roblox ‘experience’ (the term used to describe games and similar digital environments on the Roblox Platform) specifically so the experience could be connected with the dolls and used in promotional materials, along with Roblox’s name – all of which directly violate Roblox’s Terms of Use and longstanding intellectual property rights.” WowWee goes even further, according to the complaint, as in promoting the infringing dolls, it “has implied that its products are associated with and sanctioned by Roblox – a ploy aimed directly at profiting off of Roblox’s popularity.” (Roblox asserts that “because of [its] skyrocketing popularity, demand for toys based on [its] brand has skyrocketed, too,” leading the company to enter into “only a select few licensing agreements” with third-party manufacturers, including Jazwares, which makes physical toys based on Roblox’s avatars.)

Setting out claims of copyright and trademark/trade dress infringement, as well as unfair competition and false designation of origin, in the lawsuit, Roblox asserts that its avatars not only have a “distinctive” (unregistered) trade dress, “rendering them protectable under the Lanham Act,” but they the designs are registered with the U.S. Copyright Office. 

On the trade dress front, Roblox asserts that its avatars have “a distinct overall look and feel” that stems from their: “(1) humanoid, blocky shape; (2) cylindrical heads; (3) C-shaped hands; (4) block-shaped legs; (5) square or rounded arms; (6) cartoon-like facial expressions and lack of a nose; and (7) the particularized combination of these elements.” This “distinct look” has remained consistent since Roblox first developed its avatar design in 2007, the company claims, and thus, “consumers identify this distinct look and feel with the Roblox Platform,” making it so that consumers are likely to be confused about the source of the defendants’ “My Avastars” dolls. 

(For a point of comparison, LEGO A/S describes the registered trade dress of its mini figurines, as “the three-dimensional configuration of a toy figure featuring a cylindrical head, on top of a cylindrical neck, on top of a trapezoidal torso of uniform thickness, with flat sides and a flat back, where arms are mounted slightly below the upper surface of the torso, on top of a rectangular plate, on top of legs which bulge frontwards at the top and are otherwise rectangular with uniform thickness, on top of flat square feet.”)

Roblox Lawsuit

“Just like” its avatars and licensee Jazwares’ physical toy offerings, Roblox alleges that the defendants’ “My Avastars” consist of “humanoid figures with cylindrical heads, C-shaped hands, block-shaped bodies and legs, square or rounded arms, and cartoon-like facial expressions that lack a nose,” making it likely that consumers will confuse the My Avastars dolls for Roblox and Jazwares’ products. Roblox also claims that the defendants are on the hook for trademark infringement in connection with its use of the Roblox word mark and stylized logo “on their social media accounts and/or website to advertise the My Avastars dolls and divert consumers looking for Roblox toys away from Jazwares’ Avatar Figurines and toward the My Avastars dolls for the purpose of commercial gain.” 

In terms of its copyright claim, Roblox asserts that its “Classic Avatars, including the Roblox Classic Avatar bases and all derivative works thereof, constitute original works of authorship and copyrightable subject matter,” which the defendants infringed by modifying to create the My Avastars dolls – which Roblox claims amount to “substantially similar” derivative works. (Are they substantially similar?) The defendants then went on to “copy, reproduce, offer for sale, and publicly display those derivative works, which incorporate Roblox’s copyrighted Roblox avatars and Classic Avatars bases, on [their] website and other third-party websites,” the company claims. 

Still yet, Roblox alleges in the lawsuit that WowWee has engaged in intentional interference with contractual relations and breach of contract for violating the Terms of Use that must be accepted before anyone can create an account and access the Roblox Services, namely by infringing Roblox’s alleged rights in the avatar designs, as well as the Roblox name and logo. Beyond that, Roblox asserts that WowWee knew that Gamefam – “the first and only fully-dedicated, professional game publishing company on Roblox” – had similarly agreed to the terms, including “‘promis[ing] and commit[ting] not to make any use of Classic Avatars or Modified Classic Avatars’ that is prohibited by [Roblox’s] Terms.” As such, by enlisting Gamefam to create “a doll specifically for use with a Roblox experience,” WowWee “deliberately and intentionally interfered with the contractual relationship between Roblox and Gamefam” and caused Gamefam “to violate numerous provisions in the Terms.” (Gamefam is not listed as a defendant in Roblox’s complaint.)

Roblox says that it is looking “to halt WowWee’s blatant and admitted copying of Roblox’s copyrighted works, and to put a stop to WowWee’s ongoing efforts to profit off of Roblox’s trademarks, trade dress, and hard-won reputation and success”  by way of preliminary and permanent injunctive relief, and is also seeking monetary damages, namely, actual damages, as well as all of the defendants’ profits or gains of any kind from its acts of infringement, including a trebling of those damages and profits. 

UPDATED: WowWee issued a lengthy statement in response to the Roblox lawsuit, asserting that it believes that Roblox’s allegations are “completely meritless,” and that its “actions are another example of a company using litigation as a growth strategy. Despite being a publicly traded corporate giant with a multi-billion-dollar revenue stream, it is targeting a family business whose goal is to provide children with another way to express their individuality through play. Yet, as parents have been teaching their children for generations, giving into a bully encourages them to bully again.”

WowWee also stated, “Since Roblox began as a platform that encouraged collaboration with its users (to Roblox’s benefit), WowWee believed My Avastars would be a welcome addition to the Roblox platform. However, in June 2022, a week after WowWee publicly announced the creation of its My Avastars dolls, Roblox changed its terms of use to the detriment of the creative community.” 

The case is Roblox Corp. et al, v. WowWee Group Limited, et al, 3:22-cv-04476 (N.D. Cal.)

Retail is rife with legal battles that pit industry occupants – from luxury brands to sportswear titans – and their valuable trademarks against one another. With the first half of the year behind us, here is a look at roughly a dozen currently pending trademark lawsuits that are worth keeping a close eye on, as brands clash over the use of their trademarks in connection with the marketing and sale of non-fungible tokens (“NFTs”), Chanel continues to face off against a couple of resale entities, footwear brands wage lawsuits over their trademarks (and trade dress), and celebrities and other big companies are slapped with reverse confusion-focused suits over newly-launched (or in Meta’s case, relatively newly-rebranded) endeavors.

No shortage of these cases are expected to provide guidance for brands and trademark practitioners, alike, with matters that are being waged over the use of marks on virtual goods/services (i.e., in the metaverse) and/or in connection with NFTs, likely to be especially useful in helping to lay the groundwork for future actions in this space.

Hermès International v. Mason Rothschild

In one of the first headline-making lawsuits involving NFTs, Hermès filed a trademark infringement, federal trademark dilution, false designations of origin, false descriptions and representations, cybersquatting, injury to business reputation, misappropriation, and unfair competition lawsuit against Mason Rothschild, the individual behind the collection of 100 MetaBirkins NFTs, early this year. Tied to images depicting furry renderings of its famous Birkin bag, Hermès claims that in furtherance of his sale of the NFTs, Rothschild simply “rip[s] off [its] famous BIRKIN trademark by adding the generic prefix ‘meta,’” which refers to “virtual worlds and economies where digital assets such as NFTs can be sold and traded.”

Rothschild has since argued that his “fanciful depictions of fur-covered Birkin bags and his identification of his artworks as ‘MetaBirkins’ are artistically relevant and do not explicitly mislead about their source or content,” and thus, should be protected from trademark liability by the First Amendment. While the court agreed that the Rogers test should be used to determine whether Rothschild’s use of Hermès’ marks is actionable under the Lanham Act, SDNY Judge Jed Rakoff determined in May that Hermès has sufficiently set out allegations that Rothschild’s use of “MetaBirkins” is not artistically relevant or is explicitly misleading and therefore, fails to meet the Rogers test.

Counsel for Rothschild lodged a memo of law in support of “an immediate interlocutory appeal” in early June, arguing that the case addresses “an issue being closely watched by the press because it is of special consequence to society at large and art markets in particular: whether artists are free under the First Amendment to depict or refer to trademarks in their art, and to describe what they have depicted, without fear of trademark liability.” Hermès subsequently pushed back in a memo of its own.

Reflecting on the case, a rep for Rothschild told TFL, “The judge ruled that MetaBirkins are artistic speech protected by the First Amendment. There are two remaining questions that the judge said need to be addressed. First, is the title “MetaBirkins” artistically relevant to the artwork? In our view the answer is clearly yes—the artworks are illustrations of imaginary fur-covered Birkin bags, and the title MetaBirkins describes what the artworks are about. The second question is whether I’ve made any explicit claim that Hermes is responsible for the MetaBirkins artwork, and again we look forward to showing that I’ve always identified myself as the creator, not Hermes.”

The case is Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 (SDNY).

Chanel v. The RealReal, Chanel v. What Goes Around Comes Around

Chanel’s trademark-centric lawsuits against The RealReal (“TRR”) and What Goes Around Comes Around (“WGACA”) are still underway in the SDNY roughly four years after the cases were filed – with the parties in both cases currently clashing over discovery.

In the enduring trademark and anti-competition lawsuit that Chanel filed against TRR, the brand accuses the resale platform of “selling counterfeit CHANEL handbags, while also “represent[ing] to consumers that it ‘ensure[s] that every item on TRR is 100% the real thing, thanks to our dedicated team of authentication experts,’” and then offering up and selling a number of “counterfeit” Chanel products. Chanel has also taken issue with TRR’s “advertising and marketing practices,” claiming that the reseller “has attempted to deceive consumers into falsely believing that [it] has some kind of approval from or an association or affiliation with Chanel” when no such association exists.

Following a stay in the case while the parties participated in a mediation with the aim of a settlement, counsels for the two companies alerted an SDNY judge in December 2021 that they were “unable to reach a resolution of the matter at this time.” As of July 1, the parties were slated for a discovery hearing, including on whether certain documents should be clawed back as privileged, as Chanel has argued.

Meanwhile, Chanel is still embroiled in the separate – but similar – case that it filed against WGACA. After refusing to toss out the bulk of Chanel’s claims, including its trademark infringement and false association causes of action, a New York federal court ordered that the New York-based reseller provide additional information about its sale of Chanel-branded products. In an order in June, SDNY Judge Louis Stanton ordered WGACA to produce the monthly financial statements dating back to 2018 that its expert used to calculate WGACA’s profits, along with its summary of Chanel-branded product “sales and costs,” along with updated “Google Analytics information, data from Bitly, and internal reports relating to WGACA’s advertising using Chanel’s trademarks” – and the effectiveness of such ads.

Reflecting on the significance of the lawsuits, Foley & Lardner’s Jeffrey Greene and Allison Haugen have stated that the implications “could be broad-reaching, providing guidance to resellers on the parameters of a fair use defense to trademark infringement claims.” They also stand to provide “insights into the validity of antitrust-type claims in instances of claimed interference with the resale market, particularly in connection with Chanel v. The RealReal, as well as how resellers ought to describe the authenticity of the goods they sell.”

The cases are Chanel, Inc., v. The RealReal, Inc., 1:18-cv-10626 (SDNY), and Chanel, Inc. v. What Goes Around Comes Around, LLC, et al., 1:18-cv-02253 (SDNY).

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