Intellectual Property

Stripes For All After Verdict In Thom Browne Trial

Thom Browne will likely continue to press as much juice from its victory fruit as possible.

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Street Style In Berlin – August, 2016

(Photo by Christian Vierig/Getty Images)

Trademark trials are fun, especially when they involve brand-name combatants unafraid to push each other to the breaking point. Or at least to the point of a jury verdict. In the latest example of a trademark jury verdict of interest, both the legal and fashion press was abuzz last week about the results of the Southern District of New York showdown between sneaker and activewear monolith Adidas and Zegna-owned fashion house Thom Browne. My fellow ATL columnist Scott Alan Burroughs crafted a great pre-trial analysis of the issues in his column last week. There, he expressed a correct prediction that “it became clear that the case, and to a degree the future of stripe use on garments, would soon be in the jury’s hands.”

As was widely reported, the jury did speak, finding in Thom Browne’s favor. Judge Rakoff, who presided over the trial, then entered final judgment in Thom Browne’s favor, as the jury had found the company “not liable on the … claims of trademark infringement and trademark dilution brought by plaintiffs adidas America, Inc. and adidas AG.” In celebration, Thom Browne was quick to the social media draw, with a cheeky Instagram post showing models in what seems like pretty uncomfortable striped men’s underwear accompanied by the claim that the company was “back to business.”

That Thom Browne took a public victory lap after its hard-earned trial win should not come as a surprise. IP cases that go to trial are those where both sides have convinced the court that there is at least some merit to their positions — and taking on a litigious behemoth like Adidas is not for the faint of heart. It is well-known that Adidas has been hyperaggressive in terms of policing the market for the use of stripes on footwear and apparel, with no hesitation to use its unlimited resources to extend the proverbial fence around its intellectual property. In fact, it was reported that it had gotten Thom Browne to back off from use of stripes on a product over a decade ago, giving Adidas some prior history of successful assertion against the target it chose to take to trial. Add in that it had assembled evidence in the current case that a measurable number — 30% of those surveyed — of customers were confused about the source of the Thom Browne products at issue, and it is not hard to see why Adidas chose to press the case into the jury’s hands. Now that it has lost, I would submit that absent some kind of settlement, we best take seriously Adidas’ pronouncements that it won’t hesitate to test the jury’s decision on appeal. At a minimum, the potential of appeal suggests that the last chapter of this trademark saga will yet be written.

For its part, Thom Browne will likely continue to press as much juice from its victory fruit as possible. For a fashion company, marketing is of the utmost importance — and milking every bit of marketing benefit from a trial win against one of the most powerful IP owners in the world is both wise and essential for Thom Browne going forward. There are many ways to use a legal victory to buttress a brand, including by publicly celebrating what some may have considered to have been an unlikely underdog victory. Bonus publicity points are also in order for the coverage of Thom Browne’s testimony at trial, which at least in the fashion press has included descriptions of his signature, if unorthodox, stylistic choice to wear a short suit with long socks in court. With the typical statement from a company founder on how fighting the case through verdict was a matter of principle thrown in, this case has all the elements of the traditional underdog drama in evidence. In Mr. Browne’s own words: “It was important to fight and tell my story,” Browne told The Associated Press, leaving the courthouse after the verdict. “And I think it’s more important and bigger than me, because I think I was fighting for every designer that creates something and has a bigger company come after them later.”

While I am sure that the resources of its corporate parent Zegna were of help, kudos to Thom Browne for sticking things out to a decision point are also in order. Having represented defendants in trademark cases, I know how frightening it can be to face a potential profit disgorgement, on top of the cost of litigating a case to what can turn on an uncertain factual determination by jurors who may be much more familiar with the larger brand owner. But Thom Browne took that risk and prevailed.

Ultimately, trials not only help resolve disputes between parties — they can also be of outsized benefit in helping the broader market gauge the true scope of the contested IP rights. The attention on this case, as well as the verdict, is justified by the position that Adidas occupies in the pantheon of world-famous brands. That position, coupled with its willingness to assert its rights at every opportunity, will continue to make Adidas a formidable IP foe for competitors worldwide. At the same time, many are cheering Thom Browne for perhaps introducing some measure of potential restraint on the part of Adidas in the future. While we may never get to a place where apparel or footwear companies are operating in a world of stripes for all, there is at least some home that Adidas won’t control all the stripes.

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Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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