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Juicy Couture, Inc. v. L'Oreal USA

September 11, 2006

JUICY COUTURE, INC. AND L.C. LICENSING, INC., PLAINTIFFS,
v.
L'OREAL USA, INC. AND LUXURY PRODUCTS, LLC, DEFENDANTS.



The opinion of the court was delivered by: Denise Cote, District Judge

OPINION AND ORDER

On April 19, 2006, following a bench trial, the trademark infringement claims brought by Juicy Couture, Inc. and L.C. Licensing, Inc. ("Couture") against L'Oreal USA, Inc. and Luxury Products, LLC ("Lancôme") were dismissed and judgment was entered for the defendant. Juicy Couture, Inc. v. L'Oreal USA, Inc., 04 Civ. 7203 (DLC), 2006 WL 1012939 (S.D.N.Y. Apr. 19, 2006) ("Opinion"). Lancôme has moved to recover its attorneys' fees from Couture under the Lanham Act's fee provision, 15 U.S.C. § 1117(a).*fn1 The motion is granted in part.

At the time Couture, a clothing manufacturer, filed suit in 2004, based on an allegation of trademark rights in the mark Juicy, it understood it faced an uphill battle. By the time fact discovery was completed, it understood that it had no chance to prevail on its claims. Despite that knowledge, it pressed on and searched in vain for a viable theory of trademark infringement, largely abandoning the theories on which it had filed suit. The trial evidence revealed Couture's motivation for persisting in this litigation. Although Lancôme's use since 2000 of the mark Juicy in connection with cosmetics had done no damage to Couture's clothing business, Couture wanted to expand into the cosmetics market and knew that it could not do so without confronting Lancôme's well-established use of the word Juicy. Hoping to force Lancôme to agree to "share" the mark, Couture continued with the litigation. Its conduct warrants an award of attorney's fees for the period following the close of fact discovery.

Background

The background and procedural history of this litigation is described in the Opinion and familiarity with that Opinion is assumed. Only those facts relevant to the instant motion will be summarized here.

Couture's primary business is women's clothing. Couture was launched in 1989 as Travis Jeans. Beginning in 1996, Couture began to use the marks JUICY and JUICY COUTURE and from that time has built is business around the name Juicy.

Couture had never sold or marketed cosmetics, but it hoped eventually to become a lifestyle brand and sell Juicy-branded fragrances with some associated cosmetics. It tried but was unable, however, to find a willing licensing partner to create a line of Couture cosmetics and no cosmetics line has been launched.

Lancôme is a leading maker and seller of cosmetics and fragrances. Lancôme decided to use the word Juicy as a name for a lip gloss, JUICY TUBES, in 1999. Couture had only modest success at that time and Lancôme had no knowledge of Couture or its products. JUICY TUBES was launched in 2000 as part of a seasonal collection and became a permanent part of Lancôme's product line in 2002. Lancôme introduced a second Juicy product, a lipstick called JUICY ROUGE, in 2003. JUICY ROUGE was introduced to the United States market through a promotion called Juicy [Gossip]. In 2004, Lancôme launched four more Juicy products, Juicy Vernis (a nail polish), Juicy Crayon (a lip gloss pencil), Juicy Tubes Pop (a lip gloss with a tingling sensation), and Juicy Wear (a 2-step lipstick). Juicy Vernis, Juicy Crayon and Juicy Rouge were launched in the United States in May 2004 through a promotional campaign called Juicy Pop. Juicy Wear was launched in July 2004.

Couture's lawsuit was the culmination of an escalating conflict between Couture and Lancôme over the word Juicy which began in Europe in 2003, on the eve of Couture's acquisition by Liz Claiborne in April 2003. Beginning in February of that year with an opposition to Lancôme's application to register Juicy in France for the class of cosmetics, Couture regularly opposed trademark registrations filed by Lancôme in Europe for product names containing the word Juicy. Brief settlement negotiations took place in July 2004 but proved futile.

As Lancôme developed its line of Juicy products it systematically filed trademark registrations in the United States. Couture never opposed any of Lancôme's United States registrations until July 2004, after the breakdown of the settlement discussions in Europe. Couture filed its Lanham Act lawsuit on September 9, 2004 ("Complaint"). As of that time, two Lancôme Juicy marks had been published without any opposition from Couture. Lancôme obtained registrations for JUICY TUBES in April 2001, and for JUICY ROUGE in April 2005.

The Complaint asserted rights in Couture's registered trademarks JUICY, JUICY COUTURE and CHOOSE JUICY as well as common law rights in five slogans ("Slogans") that Couture used on t-shirts. The Complaint alleged that Lancôme's sale of six products, JUICY TUBES, JUICY ROUGE, Juicy Tubes Pop, Juicy Crayon, Juicy Vernis, and Juicy Wear, and Lancôme's use of Juicy and Juicy Pop to describe a line of cosmetics and fragrances violated Couture's trademark rights. The Complaint made seven claims: trademark infringement, false designation of origin and unfair competition, and trademark dilution under the Lanham Act; deceptive acts and practices and trademark dilution under New York General Business Law; and trademark infringement and unfair competition under New York common law.

Following the close of fact discovery, motion practice began. First, on November 16, 2005, Lancôme moved both for partial summary judgment precluding a monetary recovery, because Couture could not show bad faith, and for summary judgment on its affirmative defense of laches. On December 6, 2005, Lancôme served, but did not file, a motion for Rule 11 sanctions addressed to the state law claims of trademark dilution and deceptive acts and practices. When Couture did not agree to dismiss those claims, on January 27, 2006, Lancôme moved for summary judgment on the claims. The summary judgment motion achieved what the Rule 11 motion did not: on February 10, the parties stipulated to a voluntary dismissal of these state law claims.

Oral argument on the remaining two summary judgment motions was held on February 15, 2006. During the course of the argument, Couture substantially altered its case. Couture limited its claims to three theories of infringement: Lancôme's sale of the product named Juicy Wear in 2004, its use of the term Juicy in its Juicy Pop marketing campaign in 2004, and its display of cosmetics products bearing the name Juicy together on a Lancôme counter to create the impression that there is a Juicy collection. Couture abandoned any claims that the sale of JUICY TUBES, JUICY ROUGE, Juicy Tubes Pop, Juicy Crayon, or Juicy Vernis infringed its rights. When it came to the question of its entitlement to damages (as opposed to its claim for Lancôme's profits) Couture asserted that it had been damaged because Lancôme (1) had sold or given away flip-flops and tote bags that are "products which Juicy Couture sells under its trademark," exposing Couture to lost sales, and (2) had sold a fragrance,*fn2 "which is a product which is soon to be launched" by Couture, placing price pressure on Couture and eroding its potential market.*fn3 Although expressing extreme skepticism that Couture could defeat the affirmative defense of laches or show Lancôme's bad faith, the Court denied the two remaining summary judgment motions.*fn4

In response to Couture's novel theory that the presentation of non-infringing products in close proximity on a store counter could support an infringement claim, Lancôme brought a motion in limine. Couture then abandoned the theory, rendering the motion moot. Lancôme's motions in limine to strike the testimony from the four Couture experts were largely granted. The testimony from two experts was stricken in its entirety, the testimony from one was stricken in part, and the testimony from the survey expert, which is described below, was accepted only because the trial ...


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