The US District Court for the Southern District of New York recently granted summary judgment in favor of Lucky Brand Dungarees, Inc., Liz Claiborne, Inc., and Lucky Brand Dungarees Stores, Inc. (collectively, the “Defendants”), with respect to the Marcel Fashions Group, Inc. (“MFG”), trademark infringement action. Finding that the merits of the case had previously been decided in the Defendants’ favor in a 2005 lawsuit, the court dismissed MFG’s claims, thereby allowing the Defendants to continue using the LUCKY BRAND mark.
Lucky Brand has been selling jeans and apparel for more than 20 years through its own and third-party retail outlets, and is the owner of numerous federally registered trademarks including the LUCKY BRAND mark. MFG is the owner of a federal registration for the mark GET LUCKY that covers clothing. The parties have a long history of trademark disputes involving their respective marks. In 2003, the parties settled a lawsuit in which the Defendants agreed to stop using the GET LUCKY mark on clothing. Then, in 2005, Lucky Brand sued MFG for trademark infringement due to MFG’s launch of a GET LUCKY jeans line. MFG counterclaimed for infringement and breach of the 2003 settlement agreement based on the Defendants’ continued use of the GET LUCKY and LUCKY BRAND marks. In 2009, the court found that the Defendants had only infringed the GET LUCKY mark and issued a negotiated Final Order and Judgment (the 2009 order) awarding MFG compensatory and punitive damages and enjoining the Defendants from using the GET LUCKY trademark or a colorable imitation thereof. The 2009 Order made no mention of the LUCKY BRAND mark.
In April 2011, MFG brought an action seeing injunctive relief against the Defendants for their continued use of the LUCKY BRAND mark, arguing that such use constituted a colorable imitation of the GET LUCKY mark, and therefore violated the 2009 Order. The Defendants moved for summary judgment asserting that MFG’s action was barred by the doctrine of res judicata, which prevents courts from relitigating matters that have already been tried. Reviewing the facts of the case, the court held that res judicata clearly applied. In 2005, the court found that the Defendants’ use of the LUCKY BRAND mark did not amount to trademark infringement. Moreover, and as admitted by MFG, the 2009 Order was silent as to the LUCKY BRAND mark and therefore did not restrict the Defendant’s use. Accordingly, because MFG did not allege any new facts in the dispute, the court granted the Defendants’ motion for summary judgment on the basis of res judicata.
This case presents a cautionary tale for trademark owners. While a successful trademark infringement suit may result in damages, ensuring that the parameters of an injunction are clear and well crafted is essential. Because trademark rights are not viewed in a vacuum in requesting injunctive relief, it is important to consider the scope and meaning of an injunction to ensure that a defendant’s future use does not create similar problems. These principles also apply in settlement and coexistence agreements. Arent Fox is continuing to monitor this case and cases related to trademark infringement and the fashion industry.