Patagonia and the Gap have settled their differences in a lawsuit that pitted them against one another over “lookalike” fleece jackets. On the heels of Patagonia filing a trademark infringement and dilution suit against the Gap in November 2022, accusing it of offering up jackets that infringe the source-indicating design of its Snap-T Fleece trade dress, as well as its P-6 mountain logo and PATAGONIA word mark, the parties alerted the U.S. District Court for the Northern District of California that they have reached an agreement to resolve their respective claims, bringing the case to an early close.

According to the joint stipulation and proposed order that they filed with the court on Tuesday, Patagonia and the Gap stipulate and agree that the second amended complaint that Patagonia filed against the San Francisco-based mall retailer and each cause of action asserted therein shall be dismissed with prejudice. At the same time, they also agreed that the Gap’s declaratory judgment counterclaim against Patagonia and the cause of action asserted therein shall be dismissed – albeit without prejudice. The court issued an order on Wednesday and terminated the case. 

Some Background: In addition to alleging that the Gap infringed its PATAGONIA word mark, Patagonia took issue with the Gap’s alleged sale of copies of its “immediately recognizable” Snap-T fleece design, complete with a rectangular logo that is “highly similar” to [its] P-6 logo. Patagonia alleged that its Snap-T fleece trade dress consists of “a snap placket and matching pocket flap, rendered in contrasting color from the fleece and in different fabrication. Piping is used on the collar, cuffs, and waist and is often rendered in a contrasting color. The rectangular P- 6 logo is placed above the pocket flap.”

Gap and Patagonia fleece jackets
Patagonia’s Snap-T fleece (left) & Gap’s fleece jacket (right)

Taken together, the fleece design and the logo are “designed to make it appear as though Patagonia is the source of Gap’s products or has collaborated with Gap or authorized use of its trademark and trade dress,” Patagonia argued in its lawsuit.

In response, Gap set out an array of defenses, arguing that, among other things, Patagonia “unreasonably delayed bringing its claims” since Patagonia first contacted it regarding very similar jackets that were being sold by Gap, Inc.-owned Old Navy in October 2015, thereby, barring those claims by the defenses of laches, and acquiescence, waiver, and estoppel. Gap also lodged a declaratory judgment counterclaim, seeking a declaration from the court that “the overall design of the jacket is not protectable trade dress and is in the public domain,” as evidenced by similar jackets being offered up by other companies, including LL Bean, Land’s End, Columbia, Vineyard Vines, Bonobos, J. Crew, and Walmart. 

THE BIGGER PICTURE: Patagonia may not have ultimately deemed it worthwhile to roll the dice when it comes to the validity of its Snap-T Fleece trade dress, which is precisely what Gap was challenging by way of its counterclaim. In addition to claiming that the design is in the public domain, Gap argued that the overall design of the Snap T product does not function as trade dress because it is comprised of functional elements, and not acquired distinctiveness. (More about that here.) A declaration from the court to that effect would make it difficult for Patagonia to enforce that mark going forward. 

As for Patagonia’s dilution claim, which the Gap took issue with on the basis that Patagonia’s complaint contained “no allegations that Gap is using PATAGONIA or any similar mark,” it is worth noting that Patagonia would not have had an issue – from a fame point of view at least. You may recall that in 2019 the U.S. District Court for the Central District of California found that Patagonia sufficiently alleged that the PATAGONIA trademark is famous and distinctive (and rejected Anheuser-Busch’s motion to dismiss as a result). In that case, Anheuser-Busch sought to escape the trademark claims that Patagonia waged against it over its “Patagonia Brewing Co” brand by arguing that the PATAGONIA mark is not sufficiently “famous” to benefit from dilution protections. Siding with Patagonia, Judge Virginia A. Phillips of the U.S. District Court for the Southern District of California held that Patagonia had sufficiently alleged – including by showing $10 billion in sales since 1985 – that its mark is both “famous and distinctive.” 

The case is Patagonia, Inc. v. The Gap, Inc., 3:22-cv-07437 (N.D. Cal.).

Nordstrom is selling lots of counterfeit Patagonia wares, the outdoor apparel brand asserts in a new lawsuit. According to the complaint that it filed with a California federal court on Tuesday, Patagonia claims that despite “hold[ing] itself out as a trusted retailer with a strong reputation among its customers,” Nordstrom has sold “thousands of counterfeit Patagonia sweatshirts and t-shirts through its Nordstrom Rack stores.” To make matters worse, Patagonia states that Nordstrom was an authorized dealer of Patagonia apparel for many years, making it so that “while [it] is no longer an authorized Patagonia dealer, Nordstrom’s customers expect to find genuine Patagonia product at Nordstrom stores, including its Nordstrom Rack stores, which Nordstrom advertises as carrying ‘the same vendors [as those] carried” in its main brand stores. 

Setting the stage in the newly filed lawsuit, which was first reported by TFL, Patagonia asserts that in 2023, “shortly after the end of the years-long dealer relationship between [it] and Nordstrom,” which Patagonia states that it “elected not to renew,” Nordstrom began selling counterfeit Patagonia products at Nordstrom Rack stores. The “counterfeit” wares contain trademarks that are “identical to [Patagonia’s] P-6 logo artwork and trademark, and that are identical to the PATAGONIA word mark,” per Patagonia. Not only do the copycat wares bear counterfeit logos and other trademarks, the garments, themselves, are “identical to and compete directly with goods sold by Patagonia, including sweatshirts and t-shirts,” Ventura, California-based Patagonia claims. 

In addition to causing confusion among consumers about the source of the products, “These obvious counterfeits – especially to Nordstrom who knows Patagonia’s products well – also deliberately mislead customers about the quality of the materials used and the conditions in which they were made.” For example, the counterfeit sweatshirts include a neck label that “prominently” – and falsely – advertises them as being made of “organic cotton” when the care and content label on the very same garments “lists the fiber as ‘100% recycled polyester.’” Beyond that, the hang tags on the counterfeit products include a “Fair Trade Certified” logo, and improperly state that the products are “made in a fair trade Certified sewing facility, which means we pay a premium to workers so they can elevate their standard of living.” 

The allegedly counterfeit Patagonia wares
Some of the allegedly counterfeit Patagonia wares

With the foregoing in mind and given that Patagonia has “spent decades, and invested millions of dollars, to establish product quality and fair labor practices as pillars of its brand,” the counterfeit goods at issue “prey on [its] reputation, misleading customers into buying poor quality products that were, on information and belief, made in factories with conditions that do not meet Fair Trade Certified requirements.” 

While Patagonia maintains that in an effort to avoid litigation, it “brought this problem to Nordstrom’s attention and requested that the company voluntarily recall the products or reimburse customers,” but Nordstrom allegedly “failed to recall these fake, mislabeled Patagonia-branded products (or even inform its customers that they purchased counterfeits of inferior fabrication and quality).” As a result, Patagonia says that it was forced to file this lawsuit against Nordstrom “to prevent further harm to [its brand] and consumers.” 

The need for litigation is heighted, per Patagonia, by its belief that Nordstrom has willfully “marketed and sold substantial quantities of products bearing the counterfeit designs through Nordstrom Rack stores across the country and has profited (and continues to derive commercial benefit) from such sales.” Nordstrom’s “actions have caused and will cause Patagonia irreparable harm for which money damages and other remedies are inadequate,” and unless it is restrained by this court, Nordstrom “will continue expanding its illegal activities and otherwise continue to cause irreparable damage and injury to Patagonia by.” 

Against that background, Patagonia sets out claims of trademark infringement and dilution, unfair competition, counterfeiting, and copyright infringement (as Patagonia maintains both trademark and copyright rights in its P-6 logo). It is seeking injunctive relief to bar Nordstrom from infringing and diluting its rights by selling counterfeit goods, as well as monetary damages. 

A Nordstrom spokesperson told TFL, “We are aware of the lawsuit and take these allegations seriously. We are currently reviewing the matter.”

The case is Patagonia, Inc. v. Nordstrom, Inc., 2:23-cv-04168 (C.D. Cal.).

Telfar is amending a pending trademark application for registration for its TC logo in the wake of a clash with Puig-owned beauty brand Charlotte Tilbury. In a notice of express abandonment (for certain classes of goods) that it filed on Tuesday, counsel for New York-based Telfar LLC alerted the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (TTAB”) that it is looking to abandon its application for a mark that consists of the letter “T” with the letter “C” surrounding the letter “T” – a nod to founder Telfar Clemens’ initials – for Classes 3 (Colognes, perfumes and cosmetics) and 9 (eyewear). 

The filing comes amid an opposition battle that Charlotte Tilbury initiated in August 2022 in response to Telfar’s quest to register its TC mark across an array of goods. (Telfar filed the application at issue in June 2021, pointing to its use of the logo on its hot-selling handbags, as well as apparel, footwear, and accessories, and citing its intent to use the logo on goods in Classes 3 and 9.) According to the notice of opposition that it lodged with the TTAB last summer, Charlotte Tilbury – the beauty brand that well-known British makeup artist Charlotte Tilbury launched in 2013 – argued that it would be damaged if Telfar’s mark was registered in Class 3, as the logo is “confusingly similar” to its own CT logo. 

“There is no issue as to priority,” counsel for Tilbury argued, as “the filing dates, first use dates, and registration dates of Charlotte Tilbury’s registrations for the Charlotte Tilbury CT marks are before the filing date listed in [Telfar’s] application.” Moreover, as a result of its “extensive use, promotion and success of the Charlotte Tilbury CT marks” – since at least as early as September 2014, the public has come to “readily associate the Charlotte Tilbury CT marks with Charlotte Tilbury,” and the registration of Telfar’s lookalike logo would conflict with that. 

Telfar pushed back in its answer in October 2022, denying Tilbury’s claim that the CT mark is “strong,” and urging that TTAB to dismiss the opposition with prejudice and permit its application to move ahead in a registration process. Not long after Telfar filed its answer, the parties alerted the TTAB that were actively engaged in negotiations to settle the matter amongst themselves, and it appears that they have reached a resolution that will see Telfar drop Classes 3 and 9 from its application. The application will now proceed with the other Classes of goods/services – Classes 14 (jewelry), 18 (handbags and luggage), and 25 (garments) – still in place.

THE BIGGER PICTURE: The move by Telfar to drop Classes 3 and 9 from its application does not feel like a major loss at this time since the brand does not seem to be using its TC logo on goods in those classes. However, the opposition, itself – and the outcome – may suggest that the brand will be up against a new trademark fight should it opt to start offering up TC-branded fragrances/cosmetics and/or eyewear at some later date. Given that fashion brands are in the habit of parlaying demand for their apparel and accessories into often-lucrative fragrance and/or eyewear licensing deals, this could signal a potential clash in the making for the future; although, it is worth noting that Tilbury is not actively offering up eyewear under its own name or CT logo, which could make for an easy (hypothetical) win for Telfar on that front, at least. For classes of goods/services that inch closer to beauty products, which is what Tilbury is known for, that would certainly be quite a bit more difficult.  

Rolex’s launch of a Certified Pre-Owned program is providing some real insight into what brand-owned secondary market endeavors look like in the luxury segment. While resale is by no means a new segment, the entrance of some of the biggest names in luxury (namely, hard luxury) is presenting a first-hand look at how such endeavors will work. Early this month, the Swiss watchmaker confirmed that on the heels of the resale endeavor rolling out in Dec. at Bucherer locations in Europe and the UK, select Tourneau Bucherer and Watches of Switzerland locations in the in the U.S. had begun offering up pre-owned Rolex models that have been approved and authenticated by the brand, itself. In addition to ensuring authenticity, Rolex is implementing a new two-year international warranty on the pre-owned watches by way of the program.

The most immediate takeaway from the Certified Pre-Owned program is the element of control. By participating in the resale market, Rolex can exercise a strong hand in dictating the buying experience in third-party retailers’ stores, the condition of the watches being traded, some of the conditions of the sale, etc. For example, Rolex has dictated how the pre-owned watches should be displayed (i.e., in a specific/separate section of participating retailers’ stores), and what the packaging looks like (pre-owned watches will come with distinct Certified Pre-Owned packaging), among other things.

The Bigger Picture here is a rising embrace by companies like Rolex – and Audemars Piguet, which is set to launch certified pre-owned program by end of 2023 – of the resale channel for their offerings. This indicates that brands want in on one of the biggest results of their strategy of consistently limiting the supply of their goods: a robust secondary market. This is also an apparent acknowledgment by brands of the fact that resale and retail can co-exist for luxury goods. (This is distinct from the view of those that see resale as a threat/a channel that will cannibalize primary sales.) Revenue is, of course, also a factor worth noting, with Audemars CEO François-Henry Bennahmias stating early this year that the company anticipates that its pre-owned business will be bigger than retail sales of new models.

This is a short excerpt from an article that was published exclusively for TFL Enterprise subscribers. Inquire today about how to sign up for an Enterprise subscription and gain access to all of our exclusive content.

Furla was handed a recently-reported win in a trademark fight in China that provides some useful insight into how the national trademark office approaches arguments over “well-known” trademarks. The matter got its start in 2021 when the Italian fashion brand initiated a number of trademark opposition proceedings with the Chinese National Intellectual Property Administration(“CNIPA”), in which it looked to block an unaffiliated third party’s quest to register “CHRISFURLA” and 凯芙拉 (which translates to KAIFULA) for use on leather goods (in Class 18), and 付拉 (which translates to FULA) for use on garments (Class 25). In its oppositions, Furla argued, among other things, that its name and the Chinese transliteration of its name both amount to “well-known” marks in the Chinese market and should be protected accordingly. 

In addition to claiming that its marks benefit from a “high reputation” among Chinese consumers, counsel for Furla argued – and the CNIPA agreed – that the opposed marks should not be registered, as they are confusingly similar to Furla’s marks and used on goods that are similar to the ones offered up by Furla. Furla asserted that its marks – including those in Classes 18 and 25 – “have been widely protected as indicators of source in China since 2012 and are continuously being used” in the Chinese market.

The CNIPA determined that the “co-existence and use” of the three opposed marks in the market alongside Furla – which has been focusing on expanding its presence in the Chinese market since the early 2010s – would “easily cause confusion and misunderstanding among consumers” due to the similarity of the marks and the goods/services at issue. As a result, the CNIPA refused to register the marks, citing cited Articles 30 and 35 of the China Trademark Law. (Article 30 precludes from registration trademarks that are “identical with or similar to a trademark [that is] already registered by another person or [has been] given preliminary examination and approval for use on the same kind of goods or similar goods.” Meanwhile, Article 35 lays out the procedure for trademark oppositions.)

In terms of Furla’s “well-known” trademark arguments, the CNIPA found that the FURLA word mark and corresponding Chinese character mark (芙拉) have earned “well-known” status. It is worth noting, as Squire Patton Boggs attorney Paolo Beconcini did in connection with an earlier win for Furla, that under Chinese trademark law, “when a rightsholder can establish a corresponding reciprocity between a foreign mark and the Chinese [transliteration], both names can be alternatively used to oppose similar marks in either English or Chinese.” The CNIPA touched on that here, stating that “through long-term and widespread use and promotion, the ‘FURLA’ and ‘芙拉’ [marks] have already established a stable relationship and thus, both refer to FURLA company.” 

For a bit of background: Trademarks are generally recognized as “well-known” (i.e., marks that are known widely by the relevant public and that enjoy a relatively high reputation in China) in two ways – by way of a decision from the CNIPA and/or the Trademark Appeal and Re-examination Board or via a court finding in connection with a trademark lawsuit. Well-known status is gauged by considering factors (set out in Article 14), such as the level of popularity/awareness of the mark by the relevant sector of the public, the duration of use of the mark, the extent, duration, and scope of advertising and/or other media attention that features the mark, etc. Such status – which is determined on a case-by-case basis and can vary widely based on the marks and the goods/services at issue – brings with it a broader scope of protections for trademark holders in China.

THE BIGGER PICTURE: The CNIPA’s move to recognize the high reputation of both the “FURLA” word mark and the corresponding Chinese character mark is likely to be “helpful to support future oppositions, invalidation proceedings and/or infringement cases, and ultimately, to better crack down on trademark squatters’ illegal filings,” according to Kangxin Partners PC’s Minling Zhang. The outcome is noteworthy, per Zhang, as it is one of the latest examples of the application of “consistent examination criteria” when it comes to determinations about well-known marks, for which the requisite standards are “exceedingly high” and success for non-native companies is relatively low.

Going forward, the brands and their well-known marks are slated to be impacted by proposed amendments to China’s trademark law, which broadens the scope of protection to well-known trademark holders at home and abroad. The new Article 18 “expands the protection afforded to unregistered well-known marks under current Article 13 by explicitly prohibiting the ‘use and registration’ of reproductions, imitations, or translations of such marks that would mislead consumers into assuming a certain degree of connection between the mark and the well-known mark sufficient to cause dilution of the distinctiveness or damage to the reputation of the unregistered well-known mark,” according to Perkins Coie’s Scott Palmer and Shujun (Sue) Zhong. “It also expands the scope of protection for unregistered trademarks that are famous to the “general public” to unrelated goods/services.”