Fashion Designer Cannot Use His Own Name On His New Fashion Line – Court Issues Trademark Injunction Against Joseph Abboud
In a case that illustrates the dangers of using your own name as a trademark, a court has issued a permanent injunction preventing fashion designer Joseph Abboud from using his own name to promote a new line of clothing – and all future goods and services. The unfortunate aspect of this ruling that hinders Abboud’s planned return to the fashion industry, is that a more careful drafting of the agreements that were part of the sale of his company in 2000 could have prevented his unintended loss of rights.
Trademark attorneys for the popular designer apparently believed that when he agreed to sell his company and trademarks – which included the USPTO registered Joseph Abboud trademark – it would not prevent him from later using his own name to promote his affiliation with a new clothing line. The Court disagreed and issued a permanent injunction preventing the designer from using his own name to promote his new “jaz” fashion line. CLICK HERE for the Court's decision.
Use Caution When Assigning Trademark Rights
In 2000, Abboud sold his company, JA Apparel Corp., for $65.5 million. As a condition of the sale, he then worked at the company under a personal services agreement until it expired in 2005, at which point he left the company for good over “creative differences.”
The personal services agreement also contained a non-competition provision, whereby Abboud agreed not to compete with the company for a period of two years after the termination of the agreement. It was after this period had lapsed that Abboud announced the launch of his new “jaz” clothing line, which does not include the Joseph Abboud name.
Abboud testified at the trial that he had only assigned the rights to use “Joseph Abboud” as a trademark and had reserved the right to use his own name to inform the public that he is the designer of the new “jaz” clothing line. The Court did not agree:
[I]f Abboud only intended to convey trademarks, then the Agreement could have and should have said: “Abboud agrees to sell…all of [his] right, title and interest in and to the trademarks identified on Schedule 1.1(a)(A).” But it said more than that, and in order to give the word “names” due meaning and effect, the Court must interpret the Agreement in a manner that provides JA Apparel with that which it expressly purchased – all of Abboud’s rights to use his name for commercial purposes . . . [T]he Court concludes that Abboud’s proposed use, in connection with his new “jaz” clothing line, of the phrases “a new composition by designer Joseph Abboud” and “by the award-winning designer Joseph Abboud,” would constitute a breach of [ ] the Agreement – irrespective of whether these phrases constitute trademark use.
A Permanent Setback
Aside from the breach of contract issue, the court also concluded that “Abboud’s proposed use of his name in connection with the “jaz” line would also constitute trademark infringement” because there would be a likelihood of confusion among consumers, dismissing Abboud’s fair use defense in the process.
Accordingly, the Court concludes that Plaintiff JA Apparel is entitled to a permanent injunction prohibiting Abboud from using his name – personally, through Houndstooth, or through any other entity with which he is affiliated –to market, advertise, promote, sell, offer to sell, or otherwise distribute any goods or services, including, but not limited to, his new “jaz” clothing line, to the consuming public.
The Full Effect of Non-Compete Agreements
It was also revealed that during the non-competition period Abboud and his attorney conducted numerous meetings with third parties in the garment industry and negotiated verbal agreements for Abboud’s return to the fashion industry.
Although the negotiated agreements were not formally executed until shortly after the expiration of the non-compete period, the Court found that Abboud violated the non-compete provision by engaging in “impermissible association with individuals or entities that were proposing to engage in competition with JA Apparel during the Restricted Period.”
The Court, however, refused to grant plaintiff monetary relief, because the new venture lost money, or order return of shipped garments that were already displayed in third-party stores. But the order makes clear that no further sales or promotions may be made using “Joseph Abboud” in any way on the new “jaz” clothing line. The case is titled: JA Apparel Corp. v. Joseph Abboud, et al., No. 07-Civ. 7787 (THK), U.S. District Court for the Southern District of New York.
PRACTICE NOTE: This case illustrates the dangers of using your own name as a trademark or service mark in your business. It also emphasizes the need for careful drafting of assignments and licensing agreements to prevent the unintended loss of rights – e.g. use of your own name in a subsequent business. Also, trademark rights could unintendedly be lost through bankruptcy proceedings because trademarks are an asset of the bankruptcy estate.
Another reason to avoid using names as trademarks or business names is that they are descriptive and not protectable without establishing secondary meaning. Michael Atkins' post discusses how The Christensen Law Firm lost its domain names because they were not protectable trademarks.
Dell alleges that the four individual defendants enrolled in Dell’s reseller program and became bound by the resale terms, where “defendants agreed (1) to refrain from unauthorized use of Dell’s trademarks; (2) not to resell Dell product without first adding value through the addition of hardware, software, or services; (3) not to resell Dell product on auction-type websites [such as eBay]; and (4) to resell their Dell product to small and medium businesses.” The complaint alleges that the defendants have used aliases to purchase Dell products and sold them through unauthorized trade channels and on eBay in violation of the reseller agreement and have made misrepresentations and misused Dell’s trademarks. For example, the defendants have allegedly sold products on eBay as “new” when they were, in fact, refurbished. The complaint asserts that “Defendants have, through their scheme of deliberate misrepresentation and concealment, purchased millions of dollars worth of Dell products from Dell and resold such product in breach of their contractual obligations to Dell and in violation of Dell’s trademark rights.” The complaint alleges the following causes of action: (1) Trademark counterfeiting and infringement 15 U.S.C. §§ 1114; (2) Unfair competition and false advertising under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (3) Trademark dilution under the Lanham Act section 43, 15 U.S.C. § 1125(c); (4) Unfair competition and false advertising under Cal. Bus. & Prof. Code §§ 17200 and 17500; (5) Unjust enrichment; (6) Breach of contract; (7) Fraud; and, (8) Civil conspiracy. The case is titled Dell, Inc. v. Kizun, et al., CV08-01821 JSL (C.D. California)
For the 2008 racing season, Camping World and Robby Gordon Motorsports entered into another sponsorship agreement where “Camping World agreed to provide two motor coaches and pay [Gordon] $200,000 per race for primary car sponsorship for four NASCAR Sprint Cup races.” The complaint alleges that Camping world has partially performed its obligations by providing one of the two motor coaches, but is now refusing to provide the second motor coach. The complaint continues that Camping World sought to renege the sponsorship agreement by demanding that Robby Gordon “ensure that Camping World’s colors and logos do not appear on [Gordon’s] car...and Gordon does not have [Camping World’s] permission to bear [Camping World’s] trademarks.” Also, Camping World has allegedly failed to pay at least $250,000 due under the sponsorship agreement. Robby Gordon Motorsports requests monetary damages for the alleged breach of contract and the Court’s determination of the rights of the parties with respect to the trademarks. The case is titled Team Gordon, Inc. v. Camping World, Inc., CV08-01731 MMM (C.D. California).
In February of 2006, Swann purchased a DVD of “A Date With Anna” and discovered that twenty two minutes of his copyrighted music was used in Kournikova’s DVD. Swann alleges that because he expressly rejected the licensing agreement offer, no agreement was ever reached and the use of the copyrighted material without license, or other consideration constitutes copyright infringement. Swann alleges that “as early as April 2003, defendants, and each of them, without Plaintiff’s permission, license, and without remuneration to Plaintiff, adapted, used, reproduced, marketed, distributed and sold Plaintiff’s copyrighted material in the defendants’ video production, a digital video disc (DVD) entitled, ‘A DATE WITH ANNA.’” Swann continues that the infringement by the defendants was intentional and knowing and seeks preliminary and permanent injunctions against the distribution of the video. The case is titled Christopher Jerry Swann v. Anna Kournikova et al., CV08-01477 R (C.D. California).
In 1991, Fox entered into an agreement with Largo International, whereby Fox quitclaimed certain of its rights in The Watchmen, but “expressly preserved, reserved and/or granted to Fox various rights, including exclusive rights to distribute the first motion picture based on The Watchmen.” Producer Lawrence Gordon was a joint venturer in Largo, and when he withdrew in 1993, Largo assigned, transferred and conveyed to Golar all of its rights in The Watchmen. In 1994, Fox and Gordon entered another agreement which required Fox to be paid a buy-out amount if The Watchmen movie was produced, in addition for profit participation of 2.5 percent of 100 percent of net profits on each motion picture, remake or sequel.