11 marca, 2013

Personal Names as Trademarks

Disputes often arise when a fashion designers parts ways with a cooperate manufacturer that has acquired proprietary rights in the designer's name. While courts are generally reluctant to forbid a person from using his or her own name, they will limit a fashion designer from using his or her name if such restraint is necessary to avoid confusion in the marketplace. For example, in one case a court prohibited Paolo Gucci, the former chief designer of Gucci and grandson of its namesake designer, Guccio Gucci, from using the name "Gucci" as part of any trademark or trade name. Paolo Gucci was allowed to use his name only to identify himself as the designer of the products sold under a separate name. 

Source: moda-online.pl

In a more recent dispute, Paul Frank Industries, Inc. ("PFI"), brought a trademark infringement action against its former namesake designer, Paul Frank Sunich, alleging Mr. Sunich's use of his name in the sale of T-shirts after he had left PFI violated PFI's trademark rights. Finding that PFI had spent significant resources marketing and advertising the now famous Paul Frank mark, the court enjoined Mr. Sunich from using his name in areas (such as clothing) where the public had come to associate to use of Paul Frank with PFI. The court also ruled that if Mr. Sunich identified himself as the designer of products in areas that the public did not associate with PFI, those products would have to bear a disclaimer stating that Mr. Sunich is no longer affiliated with PFI.

Source: en.wikipedia.org 

In ongoing litigation, JA Apparel Corp., the company that owns the JosephAbboud trademark, sued Joseph Abboud for trademark infringement in federal court in New York. In 2000, Mr. Abboud sold his trademark, "Joseph Abboud", for $65 million dollars. He later clashed with management of the company and chose not renew his contract. As provided for in his contract, Mr. Abboud was prohibited from competing with the company for a period of two years. After the expiration pf the noncomplete period, Mr. Abboud announced his plans for a new line called "jaz" which would use the tagline "a new composition by designer Joseph Abboud" JA Apparel Corp. alleged that the use of "Joseph Abboud" in the tagline amounted to trademark infringement and the terms of his noncompete agreement with the company had been violated by beginning to work on the new line before the noncompete period expired.

Source: juggle.com

The court agreed with JA Apparel in virtually all respects. It found that pursuant to the written agreement between Mr. Abboud and his former employer, JA Apparel, Mr. Abboud sold both his right to use his name as a trademark on clothing and his right to publicize his new jaz line by using his name in a tagline. The court also ruled that the tagline was neither "fgair use" nor permitted First Amendment, freedom of speech use. 

The court concluded:

"After Abboud began using and marketing clothing under his personal name, with great and deserved success, the name Joseph Abboud" became closely associated with a brand of clothing, and the personal nature of his name naturally lost some of its identity. When Abboud subsequently sold to JA Apparel, for a handsome sum of money, the rights to use his name in connection with the brand of clothing by which it had achieved prominence, he relinquished the right to capitalize on the goodwill associated with his name because that is exactly what JA Apparel purchased to promote its brand."

On appeal, the Second Circuit ruled that the contract between Abboud and JA Apparel was far from clear on the issue of "fair use", that is, whether Abboud could identify himself as th designer of the new jaz line of clothing, even while he was not using his name as a trademark. The appeals court vacated the injunction granted by the district court and instructed that the case be set down for trial. In doing so, it stated that, while it as clear that the trademarks "Joseph Abboud" and "Abboud" had been transferred, it was unclear from the contract that JA Apparel had purchased the righty to prohibit Abboud from using his ame in a non-trademark sense. Only a full trial could determine that issue.

These cases demonstrate the great care with which contracts to buy, sell, and restrict use of names as trademarks must be prepared. Such agreements must be especially clear on whether the designer may use their name in any manner whatsoever (for example, to say that a new line of apparel was designed by the designer, or that the designer formerly designed for the company) after the designer leaves the company. Unless this is crystal clear in an agreement, years of litigation may ensue.

Paul Frank Industries, Inc. v. Paul Sunich, 502 F.Supp.2d 1994 (S.D.Cal. 2007).
Paolo Gucci v. Gucci Shops, Inc., 688 F. Supp. 916 (S.D.N.Y. 1988).
Ray A. Smith, JA Apparel Sues Designer Abboud, Wall St. J., September 5, 2007, at B3.
JA Apparel Corp. v. Abboud, 591 F. Supp.2d 306 (S.D.N.Y. 2008), rev'd No. 08-3181 (2nd Cir. June 10, 2009).

"Fashion Law. A Guide for Designers, Fashion Executives, and Attorneys"