Friday, May 15, 2020

Tough Luck

The United States Supreme Court ("Supremes") unanimously decided LUCKY BRAND DUNGAREES, INC., ET AL. v. MARCEL FASHIONS GROUP, INC. on May 14, 2020.  Although the underlying dispute concerned a clash of  clothing trademarks including "Get Lucky" and "Lucky Brand", a central issue in the case concerned a legal theory called "defense preclusion".  Here the Supremes rejected defense preclusion.

Writing for the court, Justice Sotomayor provides this short summary of the posture of the case:
This case arises from protracted litigation between petitioners Lucky Brand Dungarees, Inc., and others (collectively Lucky Brand) and respondent Marcel Fashions Group, Inc. (Marcel). In the latest lawsuit between the two, Lucky Brand asserted a defense against Marcel that it had not pressed fully in a preceding suit between the parties.  This Court is asked to determine whether Lucky Brand’s failure to litigate the defense in the earlier suit barred Lucky Brand from invoking it in the later suit. Because the parties agree that, at a minimum, the preclusion of such a defense in this context requires that the two suits share the same claim to relief—and because we find that the two suits here did not— Lucky Brand was not barred from raising its defense in the later action. 
She concludes as follows:
At bottom, Marcel’s 2011 Action challenged different conduct—and raised different claims—from the 2005 Action.  Under those circumstances, Marcel cannot preclude Lucky Brand from raising new defenses. The judgment of the Second Circuit is therefore reversed, and the case is remanded for proceedings consistent with this opinion. 
Regardless of which company got lucky in this round, endless expensive litigation over a trademark covering a common English word seems anything but lucky for either firm.

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