United States: Being your Best Brand: A Lesson from the Luxury Market

This article originally was published in the 4Q2017 edition of the ACC Baltimore Focus newsletter.

Becoming, and staying, a great brand is rife with challenges and the need to protect and enforce a brand is never ending. This is especially true in the luxury world, where brands are constantly challenged by counterfeit products and parodies. The recent high-profile case of Louis Vuitton Malletier S.A. v. My Other Bag Inc. is a clear example, pitting the well-known fashion house against a rising upstart.

Louis Vuitton Malletier S.A. ("LV") sells highly recognizable luxury handbags that sell for hundreds, even thousands of dollars. LV is known for its bag designs, which are protected by trade dress, including its Toile Monogram, a distinctive brown and tan pattern. In contrast, My Other Bag, Inc. ("MOB"), makes ecofriendly canvas tote bags with a designer twist; the company's name and brand concept is an overt jab at established luxury brands, riffing off of the comic bumper stickers seen on beat-up cars that claim, "My other car is a" – fill in the blank with a luxury brand like Mercedes or Porsche. Similarly, one side of MOB's bags, has large, stylized script proclaiming "My Other Bag..." while the reverse side displays a cartoon image of a luxury handbag from various famous fashion houses including LV, Chanel, Celine, and Hermes. MOB uses similar patterns and designs to evoke the luxury bags, though selling at $30-$50, a fraction of the cost.

MOB plays up the idea that instead of using high-priced designer bags to carry dirty gym clothes and groceries, their bags "playfully parod[y] the designer bags we love, but [are]practical enough for everyday life."

Not everyone, however, found the designs playful.

In 2014, LV took MOB to court, filing a complaint in the US District Court for the Southern District of New York alleging trademark infringement of its distinctive trademarks and trade dress, dilution by blurring, and copyright infringement. With regards to the dilution claim, MOB argued the defense of fair use, specifically that use of the LV marks on its bags constitutes parody. The court agreed, finding in favor of MOB on summary judgment.

"Louis Vuitton Malletier, S.A., the maker of Louis Vuitton bags, is perhaps unfamiliar with the 'my other car' trope. Or maybe it just cannot take a joke."

Successful parody communicates to a consumer that an entity, separate and distinct from the trademark owner, is poking fun at a trademark or the policies of its owner. The MOB bag indicates that the LV bag is not the bag the consumer is carrying and creates significant distance between MOB totes and real LV handbags. Real LV handbags, MOB suggests, represent luxury and carefully cultivated exclusivity and refinery. The Court agreed.

LV argued the totes are a parody of something, but not a parody of its handbags so the argument should fail. There is evidence that MOB never intended to disparage LV, and that the bags represent a larger social commentary and humor. The Court concluded that LV takes too narrow a view of what can qualify as parody. The humor comes from the combination of the workhorse canvas bag and the wording and images that comment on society's larger obsession with status symbols and the showy status the LV bags symbolize.

According to the Court, the fact that the totes carry a message about more than just LV is not fatal to a successful parody defense. LV also argued that MOB doesn't need LV's trademarks to convey the parody, but the Court disagreed, ruling that MOB bags wouldn't make their point and wouldn't be funny if they depicted some generic handbag instead of the LV bag. Put another way, "my other bag...is some other bag" isn't much of a punchline. The Court ruled in favor of MOB granting summary judgment on all counts.

LV appealed only to have the US Court of Appeals for the Second Circuit affirm the lower court's decision. In its short opinion issued on December 22, 2016, the Court focused on MOB's parody defense to dilution and reiterated the standard – that parody must convey two simultaneous and contradictory messages: a) that it is the original and b) that it is also not the original but is instead a parody. The Court held that MOB bags do just that – they mimic the LV designs and handbags in a way that is recognizable, but as a drawing on a product that is a conscious departure from LV's image of luxury. The use of "My Other Bag..." on the totes makes clear that it isn't a LV bag, the Court stated. Further, the Court continued, the joke isn't specifically on LV, but on the luxury that LV evokes. This larger social commentary isn't fatal to the parody defense, nor is the fact that evidence supports that MOB never intended to disparage LV. The Court stated that even though the joke on LV is "gentle and complimentary" to LV, that fact does not preclude the bags from being a parody. The Court ruled in favor of MOB that MOB does not infringe LV's trademarks; that MOB's parody defense shields it from LV's dilution claim; and that MOB's parodic use of LV's designs constitutes transformative use in defense of LV's copyright infringement claim.

In July, LV petitioned the US Supreme Court for writ of certiorari, arguing the case had "far-reaching significance for countless owners of famous and distinctive marks that, like Louis Vuitton, depend on the protections of [the federal trademark dilution statute] to safeguard their intellectual property against improper dilutive uses." LV posited that the decision by the Second Circuit left famous mark owners vulnerable to widespread dilution through the production of imitation products marketed under the guise of "parody."

LV further argued that the Second Circuit's interpretation of parody creates uncertainty for all owners of famous marks who are confronted with divergent parody tests depending on the matter's jurisdiction. Specifically, that the Fourth Circuit applies a different test for parody than the Second, creating a circuit split. LV asked the Supreme Court to announce a nationally uniform parody test.

Further, LV propounded that the Second Circuit vastly expanded the fair use exception beyond the narrow bounds Congress intended when it defined parody to include those that are "gentle and complimentary." This, LV claimed, leaves famous marks vulnerable to widespread dilution through the production of imitation products marketed under the guise of parody. Products that are designed to appeal to fans of the parodied products rather than to comment on, criticize, or make fun of those products, present the harm the Trademark Dilution Revision Act was designed to prevent and leads to loss of distinctiveness of the brand.

In response, MOB argued the Second Circuit's decision did not create uncertainty, that the Fourth Circuit applied the same legal standard to a different set of facts, and that the non-precedential decision is firmly in line with prior parody cases.

Finally, on October 2, 2017, the petition for writ of certiorari was denied. The Second Circuit decision was upheld, and MOB's use of similar LV trademarks and trade dress on its canvas bags can continue.

This case is illustrative of the types of challenges that companies face in their brand protection journey. Decisions need to be made, often daily, about when to enforce a trademark and when to stand down. As the District Court noted, in some cases, it is better to "accept the implied compliment in a parody and to smile or laugh than it is to sue." Whether LV amends its aggressive enforcement strategy and follows this advice remains to be seen. For now, LV fans continue to have choice as to which bag they take to the gym and farmer's market—the real LV, or their "other" bag.

Julie A. Hopkins focuses her practice on trademark prosecution, registration and enforcement in the United States and worldwide, including searching and clearance of brand names, logos, slogans, and trade dress.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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