The Real Damage of Infringing Well-Established Global Brands

In recent weeks, there have been a number of U.S. trademark lawsuits reported in the news that have driven home the true costs of infringing well-known international brands. In one case, German footwear and sportswear behemoth Adidas filed a U.S. federal trademark infringement lawsuit against fashion designer Marc Jacobs (Case No. 3:15-cv-00582) for infringing its internationally renowned three-stripe branding. Particularly, Adidas claimed that Marc Jacobs’ MARC fashion collection line from Autumn/Winter 2014 included a four-stripe design on several pieces of clothing that infringed a number of Adidas’ registered three-stripe designs (U.S. Reg. Nos. 3,029,127, 3,087,329, and 2,278,591 and others).

It was also reported that California winemaker Joseph Phelps Vineyards (JPV) filed a U.S. federal trademark infringement lawsuit against international wine and spirit conglomerate Moët Hennessy (Case No. 2:15-cv-02803) for infringing its established sparkling wine brand DÉLICE, a registered U.S. federal trademark for wines in international class 033 (U.S. Reg. No. 1447846). JPV’s lawsuit followed Moet’s prior attempts to cancel JPV’s DÉLICE registration in a USPTO Trademark Trial and Appeal Board Proceeding (Proceeding No. 92061085), and Moët Hennessy’s launch of a sparkling wine product under the same name.

While neither of these trademark cases raise any unique cross-border IP protection issues, they do show the damaging and often unintended consequences of infringing well-established international brands. Beyond liability and associated costs arising from such lawsuits, the news reporting of these cases have arguably damaged public perceptions towards Marc Jacobs and Moët Hennessy’s goods and services. News reports of Adidas’ lawsuit not only lumped Marc Jacobs together with other “copycat” fashion designs in recent disputes, they also highlighted the fact that Marc Jacobs’ MARC fashion line was being discontinued. Similarly damaging, news reports of JPV’s lawsuit included JPV’s claims that Moët Hennessy’s acts in relation to JPV and its DÉLICE brand were “malicious,” due to Moët Hennessy’s attempts to cancel JPV’s DÉLICE U.S. trademark registration, while subsequently launching a competing wine product under the exact same name.

The damage of Marc Jacobs and Moët Hennessy’s alleged acts go well beyond trademark liability as they directly impact public perceptions towards these companies and their goods and services. News reports on the Adidas lawsuit highlighted Marc Jacobs’s business failings with its MARC line. More damaging is that such reporting also appeared to characterize Marc Jacobs’ alleged acts as copycatting, and thus unoriginal, a label no fashion designer or creative business would want. Similarly, reporting Moët Hennessy’s acts towards JPV as being maliciously aggressive portrays Moët Hennessy as being a senseless multinational business who will stop at nothing to obtain its desired results. This not only portrays Moët Hennessy as a bully, it also paints them as being similarly unoriginal. In both cases, negative reporting of such companies’ alleged acts arguably have done more damage to their business than any single trademark infringement lawsuit could ever do.

What’s The Takeaway? If there is one thing that can be taken away from these cautionary tales is that businesses need to ensure the brands they select and develop, both at home and abroad, are original. Doing so is needed not just to avoid trademark liability, but to more importantly protect their valuable public perception. Taking precautionary measures in selecting and utilizing a brand can help to ensure businesses not only reduce their trademark liability, but effectively protect positive public perceptions towards their goods and services.

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