by Paul Alan Levy
Over the past couple of weeks, several bloggers, most impressively Rebecca Tushnet, have published their analyses of a decision by Judge Jesse Furman granting summary judgment dismissing a lawsuit by Louis Vuitton Malletier against a tiny company called “My Other Bag” which produces a line of canvas totes that poke gentle fun at the famous Louis Vuitton handbag design by placing the hand-scrawled words “My Other Bag…” on one side and a photo of the Louis Vuitton “toile” design in which the letters “LV” are replaced by MOB. Louis Vuitton sued for both dilution and infringement of its mark, as infringement of its copyright, but Judge Furman recognized the apparent parody that made out a defense of fair use; he also held that Louis Vuitton had shown neither dilution (because referring to a a famous mark strengthens the mark’s association with its owner, rather than blurring that association) nor likelihood of confusion as required for a claim of infringement.
This sort of lawsuit is par for the course for Louis Vuitton, which is notoriously humorless about third parties who portray its mark in a negative light. In case after case, Louis Vuitton brings or even just threatens a loser of a lawsuit (Techdirt identifies several situations in its post about this case), and it can be very expensive to defend a trademark lawsuit. Especially when it is a small adversary that has been threatened, there is a tendency to surrender easily given the prospective costs of standing up to a bully. So Louis Vuitton has had ever more incentive to bring bogus trademark lawsuits – especially because the Second Circuit, where it is based and hence is usually able to sue, requires a showing of fraud or bad faith before a trademark plaintiff can be held liable for an award of attorney fees.
And this was, in fact, a costly victory for My Other Bag. Its revenues plummeted when customers shied away from making further purchases, worrying that Louis Vuitton might come after them for carrying infringing or diluting merchandise. And My Other Bag’s lawyers ran up $350,000 in attorney fees, more than the entire revenues for this one-woman company in 2015. Luckily for My Other Bag, its lawyers — Brian Philpott in Los Angeles and David Korzenik in New York – were willing to keep working on the case even after their client was unable to keep up with their bills.
Changing the Incentives in Cases of Trademark Bullying
Somebody needs to help lawyers and small companies like this stand up to trademark bullying. What we really need to to is change the incentives. That is why Public Citizen offered to represent defendant in seeking an award of attorney fees for having had to defend a groundless lawsuit. Drawing on arguments we made last year to the Fifth Circuit in Baker v. DeShong (that case is on hold because the trademark plaintiff filed for bankruptcy), we have urged Judge Furman to agree that the Second Circuit’s approach to whether a lawsuit is “exceptional” under the Lanham Act was implicitly overruled by the Supreme Court’s decision in Octane Fitness, which construed a similar provision allowing fee awards for “exceptional” patent cases in circumstances that go well beyond bad faith.
Our brief, filed late last night, explains the several reasons what Louis Vuitton’s law suit was completely groundless, and points out some remarkable ways in which that company made the defense needlessly expensive (including one dishonest maneuver by its lawyers that is detailed in our brief). But more importantly, our brief argued that Louis Vuitton’s conduct in this case should be judged against its background as a serial trademark bully. Awards of attorney fees can not only encourage critics of big companies to stand up to bullying, but also encourage public-spirited lawyers to follow the example of Philpott and Korzenik and stand up for such companies pro bono. The prospect of having to pay several hundred thousand dollars in attorney fees to a small company that a bully hoped to victimize (trademark cases are notoriously expensive) can also make the bullies think twice about bringing baseless claims.
We will see if Louis Vuitton is able to learn such a lesson.
