Judge Scheindlin on Gucci and Guess?
The conclusion of fashion week in New York City is an appropriate coda for Judge Scheindlin’s decision in Gucci v. Guess. In 2009, Gucci accused Guess of an elaborate scheme to knock off Gucci’s products, particularly its famous Green-Red-Green stripe, as well as related designs. The opinion includes several interesting pictures comparing the Guess and Gucci versions.
Guess moved ahead on a motion for summary judgment despite a warning from Judge Scheindlin that the issues were "fact intensive" and required a trial. So it should come as no surprise that Judge Scheindlin after "careful consideration of the voluminous submissions with which the parties have inundated this Court," largely denied the motion. Guess may not have liked the result, but for practicing lawyers the opinion is as clear a review of often frustratingly amorphous trademark issues as one will find.
The opinion contains a particularly thorough analysis of Gucci’s claim of "post-sale confusion," where infringement is actionable, not because the consumer was confused, but because the consumer purposely bought a cheaper product that looked similar, expecting that the public would likely be deceived into thinking it was the genuine article. This allows the consumer "to gain the same prestige at a lower price." Judge Scheindlin held that the test for post-sale confusion turns on an analysis of eight different factors set forth in Polaroid Corp. v. Polared Elecs. Corp., 287 F.2d 492 (2d. Cir. 1961), including any bad faith by the defendant, and the relative quality of the products. Guess also sought summary judgment that Gucci was not entitled to monetary damages based on its trademark infringement claims because Gucci could not prove any actual lost sales.
Judge Scheindlin agreed that Gucci could not prove its lost sales, but still denied Guess’s motion because Gucci raised genuine issues of fact as to post-sale and actual confusion as well as bad faith by Guess. Among the interesting bad faith evidence was an Amazon.com receipt that Paul Marciano, head of Guess, purchased a book entitled "Gucci by Gucci," which prominently featured the Gucci logo style in dispute on its cover. Another piece of bad faith evidence was a "spec sheet" sent to a Guess licensed manufacturer that included a picture of a Gucci shoe, rather than a Guess prototype.
For those interested in the niceties of expert testimony, one issue where Guess prevailed was in dismissing Gucci’s claim for actual dilution of its brand (as opposed to likelihood of dilution, where Gucci’s claim remains viable). Gucci’s actual dilution claim failed because its expert couched his conclusions with conditional phrases such as "likely" to cause actual dilution and creating a substantial "risk" of actual dilution. According to Judge Scheindlin that means the report "is sufficient to raise a genuine issue of material fact as to the existence of a likelihood of dilution, [but] it does not do so on the issue of actual dilution." Conditional conclusions from an expert didn't cut it.
(Hat tip to my colleague Spencer Stiefel on this post.)