It is likely that some of the women (and men) reading this blog post have owned a pair of Lucky Brand or Marcel jeans. You may be surprised to learn that the two companies have been at war for two decades over their trademarks involving the word “Lucky.” In the most recent suit, the United States Supreme Court analyzed the case through the issue of defense preclusion. Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc., 590 U.S. ____ (2020). The question presented to the Court was whether defense preclusion was a valid application of res judicata.
The first suit between the parties began in 2001. Marcel sued Lucky Brands for trademark infringement for the use of the phrase “Get Lucky.” The parties settled the suit in 2003 with Lucky Brands agreeing not to use the phrase “Get Lucky,” and Marcel agreeing to release all claims regarding Lucky Brand’s use of its own trademarks. The second suit was in 2005, in which Lucky Brands alleged that Marcel violated Lucky Brand’s trademarks by using them in a new clothing line. Marcel filed several counterclaims that turned on Lucky Brand’s continued use of the phrase “Get Lucky.” Lucky Brand responded that Marcel’s counterclaims were barred by the release provision from the 2003 settlement agreement, but quickly abandoned that strategy. The court found that Lucky Brand had violated the 2001 settlement and permanently enjoined them from using the “Get Lucky” mark, and a jury found against Lucky Brand on Marcel’s counterclaims alleging infringement of Lucky Brand’s continued use of the phrase “Get Lucky.”
The third suit, which culminated in the Supreme Court’s May 2020 decision, was brought by Marcel in 2011. Marcel sued Lucky Brand arguing that it continued to use the word “Lucky” in violation of Marcel’s “Get Lucky” trademark. According to Marcel, this was in contravention of the 2005 judgment. The federal district court granted Lucky Brand’s summary judgment motion concluding that Marcel’s claims were the same as its counterclaims from the 2005 suit and therefore precluded. The Second Circuit Court of Appeals disagreed and concluded that the claims in the 2011 action were distinct: Marcel argued only that Lucky Brand’s use of the word “Lucky” infringed its trademark, but did not argue improper use of the phrase “Get Lucky.” As a result, the Second Circuit did not find that Lucky Brand was in contempt for violating the injunction issued in 2005 because the injunction did not prohibit Lucky Brand from using its own trademarks with the word “Lucky” in them.
On remand, Lucky Brand moved to dismiss on grounds that Marcel was precluded from pursuing its claims because it had agreed to release Lucky Brand from all claims regarding Lucky Brand’s use of its own trademarks in the 2001 action. On the contrary, Marcel argued that Lucky Brand was precluded from bringing this defense because it could have pursued this defense in the 2005 action but chose not to do so. Marcel was in essence arguing that it could bring new claims (i.e. infringement for use of the word “Lucky,” but Lucky Brands could not defend itself using the release in the 2003 settlement). The Second Circuit agreed with Marcel stating that defense preclusion barred Lucky Brand was precluded from raising this defense.
The Supreme Court granted certiorari to address whether defense preclusion is a valid application of res judicata, encompassing both issue and claim preclusion. Ultimately, the Supreme Court found that defense preclusion could bar future defenses that should have been brought when the initial suit was brought. However, defense preclusion must follow the strict application of claim or issue preclusion in order to bar defenses that should have been brought in an earlier suit. Although it endorsed defense preclusion as a valid claim, the Supreme Court did not find that it applied in the current suit. The Supreme Court reasoned that the two suits were grounded on different conduct: the 2005 suit involved the use of the trademark “Get Lucky,” whereas the 2011 suit only involved the use of the word “Lucky.” Further, because Marcel’s claims in the 2011 suit were distinct from its counterclaims from the 2005 suit, it would be difficult to bar Lucky Brand from bringing a release defense in each suit that involved different conduct. Moreover, claim preclusion generally doesn’t bar claims that are predicated on events occurring after the earlier suit: here, the allegations concerned Lucky’s use of marks in the aftermath of the 2005 suit.
While the future of the suit isn’t entirely clear, it is of course quite plausible that Lucky will be able to keep its trademarks using the term Lucky. Hopefully, those who are fashion-conscious aren’t affected: if Lucky Brand ends up losing the suit, perhaps Lucky Brand’s jeans will become a relic of past fashion. It is yet to be determined.
Elle J. Byram is a native Midwesterner, born and raised in the Kansas City area. Elle earned her law degree at the University of California Davis, School of Law. She earned her Bachelors in Psychology at the University of Colorado at Boulder as well as a Masters in clinical psychology at Pacific Graduate School of Psychology in Palo Alto, CA. Elle has worked for small and large firms doing litigation, corporate work and technology.
Desiring to start her own practice, Elle stepped out of the corporate world in 2013 and began her own solo firm, Byram Law, P.C., focused on family law, estate planning and probate administration. Elle's practice focuses primarily in family law, where Elle litigates divorces, represents victims of domestic violence and assists in every other aspect of family law.
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