A federal jury handed Thom Browne a trademark-centric win against adidas after an eight-day trial in New York City in January 2023. The headline-making verdict – which found that Thom Browne, a cult-followed fashion brand best known for its signature shrunken suiting, did not engage in trademark infringement or dilution by offering up apparel and footwear bearing a four-stripe motif – followed from more than four years of back-and-forth between the parties since adidas first initiated an opposition proceeding in 2018 in response to a trademark application that Thom Browne filed in the European Union for a four-striped mark.
Setting the stage for the now-completed trademark trial, adidas filed a trademark infringement and dilution suit against Thom Browne with the U.S. District Court for the Southern District of New York in June 2021. The German sportswear giant – which has been using a 3-stripe logo since the 1950s and is notoriously litigious when it comes to others’ use of lookalike marks – alleged that New York-based Browne was engaging in “direct competition with [it] by offering sportswear and athletic-styled footwear that bears confusingly similar imitations” of its three stripes.
All the while, counsel for Zegna-owned Thom Browne pushed back against adidas’ claims, arguing that, among other things, the likelihood of consumer confusion is low due to the two companies’ respective positions in the market and with very different price points.
With the case now in the midst of an appeal before the U.S. Court of Appeals for the Second Circuit, we have put together a brief running timeline of notable filings (complete with links to any corresponding articles) in order to help you to stay abreast of developments …
The U.S. Court of Appeals for the Second Circuit affirmed Judge Rakoff’s February 2023 final judgment, and in a separate order, Judge Rakoff denied adidas’s motion for a new trial, stating that “an opinion setting forth the reasons for this ruling will be issued in due course, at which time judgment will enter.”
Counsel for adidas and Thom Browne appeared before a panel of judges for the U.S. Court of Appeals for the Second Circuit for oral arguments centering on whether they should grant adidas’ bid for a new trial. Counsel for adidas claims that, among other issues, SDNY Judge Jed Rakoff gave the jury incorrect instructions on how to gauge consumer confusion, thereby, favoring Thom Browne. Specifically, Charles Henn of Kilpatrick Townsend argued on adidas’ behalf that Judge Rakoff erred in telling jurors to consider the “competitive proximity” between adidas and Thom Browne when adidas was not arguing point of sale confusion.
“Adidas expressly said it was not asserting confusion at the point of sale, and instead, limited its theories of confusion to initial interest confusion and post-sale confusion,” Henn told the Second Circuit panel. As such, Henn argues that the judge should not have prompted the jury to consider whether the parties compete for the same consumers.
Counsel for Thom Browne, Robert Thomas Maldonado of Wolf Greenfield, argued in response that the court “made it clear that this was a pre-sale and post-sale confusion case,” Moreover, he told the panel that “the instruction on competitive proximity is not an instruction that is limited to point-of-sale cases, [and] competitive proximity is relevant, even in post-sale cases.”
Still clashing over a number of emails that Thom Browne allegedly failed to include in discovery during the parties’ trial, adidas and Thom Browne have lodged responses to each other’s supplemental briefings. (Thom Browne’s reply can be found here, and adidas’ reply can be found here.)
The parties have lodged supplemental briefings reflecting on two questions posed by the court regarding Browne’s alleged “bad faith” failure to produce relevant emails during discovery. In its filing, adidas argued, among other things that “nearly every court to address the issue [of whether an innocent failure to produce documents during discovery constitutes ‘misconduct’ within the meaning of FRCP 60(b)(3)] has held that an innocent, inadvertent, or accidental failure to produce requested documents in discovery may qualify as misconduct … and the one appellate decision purportedly in disagreement with the great weight of authority nonetheless held that avoidable accidents may also qualify—a very low threshold.”
Moreover, adidas asserted that “post-hearing discovery revealed that Thom Browne’s failure to produce Emails 1-4 was intentional, or at the very least, grossly negligent,” thereby, “easily clear[ing] the Sixth Circuit’s (incorrect) ‘avoidable accident’ threshold under the first element of Rule 60(b)(3) and likely warrants a presumption of substantial interference under the second element.”
Meanwhile, counsel for Thom Browne argues that the innocent failure to produce documents during discovery cannot constitute “misconduct” within the meaning of Rule 60(b)(3), and that in order to obtain “the drastic relief of overturning a jury verdict,” adidas must prove, by clear and convincing evidence, an affirmative bad act by Thom Browne.
And in terms of why the four emails that form the basis of adidas’s motion were not produced during discovery and to what degree Thom Browne (or its counsel) was culpable for the failure to produce the emails, Thom Browne’s counsel argues that it utilized standard ESI discovery protocol and that the four emails at issue “were not produced during discovery due to an innocent mistake stemming from a misunderstanding between Thom Browne’s counsel and [its] e-Discovery vendor in this matter, Consilio.” Additionally, Thom Browne claims that “the unequivocal testimony from all witnesses demonstrates an absence of any intent to deprive adidas of non-privileged, responsive documents in this litigation” and also demonstrates that “no one was instructed to withhold the four emails from production,” nor did Thom Browne or its counsel make any efforts to conceal responsive documents, including the four emails.
Amid adidas’ push for a new trial, the court is calling on both parties to submit supplemental briefings on the following two questions: (1) Can even an innocent failure to produce documents during discovery constitute “misconduct” within the meaning FRCP 60(b)(3), or must the moving party demonstrate some greater degree of culpability, such as negligence, gross negligence, or recklessness? and (2) In light of the additional discovery that the parties have received, why were the four emails that form the basis of Adidas’s motion not produced during discovery, to what degree was Thom Browne (or its counsel) culpable for the failure to produce the emails and does that degree of culpability satisfy the aforementioned “misconduct” standard under Rule 60(b)(3)?
In a response, adidas sought to shift blame back to Thom Browne, asserting that “there is no escaping the fact that it withheld smoking-gun evidence and got caught.” Yet, adidas asserted that Thom Browne is asking the court “to ignore its own egregious misconduct and focus instead on how that egregious misconduct was brought to light,” namely, by “challeng[ing] how adidas found out that Thom Browne withheld smoking-gun evidence.” In its filing, adidas urges the court to deny Thom Browne’s “unjust request and reject Thom Browne’s meritless ‘unclean hands’ argument” and allow for a new trial “based on Thom Browne’s abuses of the litigation process.” (adidas is arguing that Thom Browne previously withheld relevant emails from discovery in “bad faith.”
In a bid to block adidas from successfully seeking a new trial in the parties’ ongoing clash, Thom Browne argued in a sur-reply in opposition to adidas’ motion for new trial that the sportswear giant’s actions in connection with the handling of a number of email correspondences constitutes “unclean hands, which bars the equitable relief adidas seeks.” In particular, Thom Browne takes issue with adidas’ alleged violation of a confidentiality agreement that the parties entered into in the United Kingdom that governs the sharing of e-mail content produced in connection with trademark proceedings in the UK. According to Thom Browne, adidas breached this sharing emails produced by Thom Browne in the UK with U.S. counsel and then went further when its U.S. counsel made “multiple misrepresentations, misleading statements, and omissions to this court in the ensuing months after the breach – including multiple statements that adidas US counsel had not reviewed the emails in any fashion.”
Thom Browne lodged a motion in opposition to adidas’ bid for a new trial, arguing that, among other things, it “did not (nor, to be clear, did its counsel) make any deliberate attempt to conceal the four e-mails” at issue. And even still, Browne asserts that adidas “does not even come close to meeting the extraordinarily high burden set by the Second Circuit and this district to justify discarding a jury verdict – a remedy that ‘calls for the highest level of judicial restraint’ because ‘interference with a verdict is an extraordinary measure.’”
adidas filed a motion for a new trial, arguing that Thom Browne “intentionally withheld the bad-faith emails during discovery,” including four emails that were sent during the relevant discovery period for the parties’ trial, in which Thom Browne employees “admit to the ultimate liability issue in this case – a likelihood of confusion between the company’s ‘Four Bar’ design and adidas’s Three-Stripe Mark.”
Thom Browne filed a brief urging the court to affirm the judgment of the district court on the basis that: (1) Considered in their entirety, the district court’s jury
instructions were proper and caused no prejudice to adidas; (2) even assuming the single instruction on competition for consumers was improper, adidas has not met its burden to show it was prejudiced; and (3) the district court’s evidentiary rulings were not an abuse of discretion and do not warrant a new trial.
Thom Browne filed – and the court granted – a motion for voluntary dismissal of its cross-appeal.
Adidas filed its principal brief, arguing in favor of a new trial in light of the district court’s “erroneous and harmful jury instructions” and “erroneous and harmful evidentiary rulings.”
Thom Browne filed a notice of cross-appeal to the United States Court of Appeals for the Second Circuit from the order dismissing its counterclaim for invalidity based on aesthetic functionality.
Adidas lodged a notice of appeal with the U.S. District Court for the Southern District of New York on Wednesday, alerting the court of their “appeal to the United States Court of Appeals for the Second Circuit from the Final Judgment entered in this case on January 13, 2023.”
The court entered a final judgment in favor of Thom Browne and dismissed adidas’ complaint in its entirety.
Within a matter of hours of the close of the trial that had been underway before the U.S. District Court for the Southern District of New York, the jury sided with Thom Browne. Despite adidas’s arguments to the contrary, the jury found that Thom Browne did not engage in trademark infringement or dilution by offering up apparel and footwear bearing a four-stripe motif.
Thom Browne filed its answer, complete with 18 affirmative defenses – and a counterclaim aimed at getting one of adidas’ 3-stripe trademark registrations canceled. In addition to denying the bulk of the allegations that adidas has made against it in its complaint, Thom Browne set out affirmative defenses, arguing that, among other things, it should be shielded from liability because adidas failed to take action against it – in a timely manner – over its use of a 4-stripe pattern, which has appeared on Thom Browne wares since 2009.
Judge Jed Rakoff adopted a magistrate judge’s report and recommendation, thereby, refusing to grant Thom Browne’s motion to dismiss the case.
In a motion to dismiss and corresponding memo in support, Thom Browne argued that despite asserting claims of federal and common law trademark infringement, unfair competition, and dilution based upon its “purported rights in [its] so-called ‘Three-Stripe Mark,’” adidas fails to sufficient make its case on a number of fronts. Primarily, Thom Browne argues that adidas’ claims are “too vague to provide adequate notice as to the identity of the allegedly infringing products or the factual basis for its trademark infringement, unfair competition and dilution claims.”
Adidas filed suit against Thom Browne, setting out claims of trademark infringement and dilution, as well as unfair competition, and is seeking to permanently enjoin Thom Browne from “distributing, marketing, or selling apparel and footwear using or bearing confusingly similar imitations of the adidas Three-Stripe Mark.”
On the heels of initiating an opposition proceeding in 2018 in response to a trademark application that Thom Browne filed in the European Union for a four-striped mark, adidas filed a stateside opposition with the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board, urging the trademark body to put a stop to three pending trademark applications for red, white, and blue stripe trademarks for use on footwear that were filed by the New York-based fashion brand earlier that year. The basis for adidas’ bids: Thom Browne’s marks are confusingly similar to its own pre-existing marks.