In 2009, famous Italian fashion brand, Gucci, filed a lawsuit in New York Federal Court against America’s fashion label Guess, an equally famous brand, claiming Trademark infringement and Trade dress.
After a long hard battle, Gucci prevails with the court’s recent ruling granting Gucci a $4.66 Million dollar verdict. While $4.66 million is a huge sum, the amount is significantly lower than the $120 million in damages Gucci initially sought. After successfully prevailing here in the USA, Gucci is now intent on taking the battle overseas and has announced its intention to sue Guess Inc. in China, Italy and France.
As way of introduction for readers of Ebitu Law Group, P.C. (ELG) blog, we like to, for the most part, focus on one legal concept/topic at a time. We feel it makes it easier to digest and furthers the goal of our blog which is to educate and provide information about the kinds of legal issues we tackle in our various practice areas.
This case, as is expected when a matter is filed in court, has gone through numerous stages of the litigation process (pre-trial and trial). However, the focal point here is a fundamental basic grasp of trademark law.
What Laws Typically Govern in Discussions on Trademark Disputes?
First things first, we always want to know what area of the law we are dealing with. In this instance Intellectual Property laws apply. It is subdivided into Trademark Law which is further subdivided into three key statutes/laws that typically govern Trademark disputes.
- Federal Law aka the Lanham Act;
- State statutes (law); and
- common law that deals with trademark and unfair competition
What is a Trademark?
It is any:
- Color, or
- Sound that you use to identify the source of your goods or services and to distinguish them from others in the marketplace.
When You Have a Trademark What Does it Really Mean?
Trademark law essentially says, “look, if you are the first business to use, for example, “Gucci” in the marketplace, then ‘Gucci” belongs to you and your rights are superior to that of other subsequent users. If people infringe on those rights, you can sue and hopefully win, so you can recover damages.
“Customer Confusion” is at the Heart of Trademark Infringement Suits
So what you own “Gucci” and even registered it with the US Patent and Trademark Office? That does not give you a legitimate claim anytime someone uses a trademark that resembles yours. You must, to successfully prevail on a Trademark infringement claim, show that there is a “Likelihood of Confusion” and the public would or have been confused by the subsequent use of someone else using your trademark.
How Does this “Likelihood of Confusion” Test Really Work?
Courts will look at whether the subsequent i.e. junior user has a similar product/service to that of the Plaintiff alleging infringement. They will look at the territories that the alleged infringer markets and the intent of the alleged infringer. Courts pay attention to who used the mark first.
How Do Courts Really Determine Customer Confusion?
The courts weigh 8 factors in a trademark infringement case. They ask:
- What is the similarity of the conflicting marks;
- What is the proximity of the two companies’ products or services
- What is the strength of the Plaintiff’s mark
- What is the marketing channel used by the two companies to market their products/services
- What is the degree of care likely to be exercised by purchasers in selecting goods i.e. customer sophistication?
- What was the defendant’s intent when selecting the mark
- What is the evidence of actual consumer confusion; and
- What is the likelihood of expansion of product lines
How Does the Court Determine What Qualifies as a Trademark?
The questions that would be asked are twofold:
- Does the mark have an inherent distinctiveness in the marketplace? OR
- Has the mark been used for a while now so that it has acquired distinctiveness where if the public sees it, they know it is your mark? Take for example the Gucci scenario.
The above is the basic gist of trademark law. There more cases to come, particularly in the fashion and entertainment law realm. We will cover them as they arise.
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Uduak Oduok, Esq.
Gucci $4.66 Million Dollar Win – Reuters
Gucci v. Guess Case – Telegraph.co.uk