426 F.3d 532 (2nd Cir. 2005), 04-2907, Malletier v. Burlington Coat Factory Warehouse Corp.

Docket Nº:04-2907-CV.
Citation:426 F.3d 532
Party Name:Louis Vuitton MALLETIER, Plaintiff-Appellant, v. BURLINGTON COAT FACTORY WAREHOUSE CORP., Defendant-Appellee, Four Seasons Handbags Company, and John Does 1-10, Defendants.
Case Date:October 12, 2005
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 532

426 F.3d 532 (2nd Cir. 2005)

Louis Vuitton MALLETIER, Plaintiff-Appellant,

v.

BURLINGTON COAT FACTORY WAREHOUSE CORP., Defendant-Appellee,

Four Seasons Handbags Company, and John Does 1-10, Defendants.

No. 04-2907-CV.

United States Court of Appeals, Second Circuit.

October 12, 2005.

Argued: March 2, 2005.

Plaintiff-Appellant appeals the district court's denial of a preliminary injunction against the alleged infringement of its trademarks by Defendant-Appellee. Vacated and remanded.

Page 533

[Copyrighted Material Omitted]

Page 534

THEODORE C. MAX, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (Charles A. LeGrand, of counsel), New York, NY, for Plaintiff-Appellant.

ROBERT S. WEISBEIN, Darby & Darby (Edward V. DiLello and Atul R. Singh, of counsel), New York, NY,for Defendant-Appellee.

Before: CALABRESI, POOLER, and B.D. PARKER, Circuit Judges.

CALABRESI, Circuit Judge:

When faced with the claim that two products are confusingly similar, a person's natural reaction is to place the two products side-by-side, and then, looking back and forth at them, to ascertain how comparable the two goods are. This process of simultaneous observation is, without doubt, an efficient way of identifying similarities and differences between products. One can understand, then, why district courts would engage in such a process as part of their resolution of trademark infringement suits under the Lanham Act, 15 U.S.C. § 1051 et seq. However, while simultaneous comparison may be a useful heuristic means of identifying the similarities and differences between two products, the ultimate conclusion as to whether a substantial number of consumers are likely to be confused by the similarities must be reached with a focus on actual market conditions and the type of confusion alleged. Where products in the relevant market are not typically displayed in the same locations, centering on whether they are likely to be distinguished when viewed simultaneously is incorrect, and will result in a faulty likelihood-of-confusion analysis.

In this case, it appears that the district court (Berman, J.) denied a preliminary injunction, at least in part on the basis of an inappropriate focus on the likelihood that consumers would be confused when viewing the products side by side. We therefore vacate the judgment and remand for further proceedings.

I. BACKGROUND

Plaintiff-Appellant Louis Vuitton Malletier ("LVM") is a famous French fashion design firm engaged in the business of designing, manufacturing, importing, advertising, selling and distributing designer luggage, handbags, travel leather accessories, high fashion apparel and accessories. LVM owns the federally registered Louis Vuitton Toile Monogram Designs ("Toile marks"), its flagship handbag design, which was first introduced in France in the spring of 1896. LVM also owns the unregistered Louis Vuitton Monogram Multicolore Designs ("Multicolore mark"), developed in 2002 by New York fashion designer Marc Jacobs and Tokyo-based artist Takashi Murakami and introduced in the spring of 2003. The Multicolore marks are updated versions of the traditional Toile marks, slightly rearranged and printed in a variety of colors on white or black leather surfaces. Since their introduction two years ago, they have been very successful, and (despite a selling price of between $400 and $4,000 per Multicolore bag) production has not kept up with demand.

LVM's Toile marks consist of eight trademarks registered with the U.S. Patent and Trademark Office ("PTO"). Three of those marks are "incontestable" under 15 U.S.C. § 1065, which provides that a registered mark in continuous use for a

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five-year period is presumptively valid.1 The Toile Designs feature "entwined LV initials with three motifs, a curved diamond with a four-point star inset, its negative, and a circle with a four-leafed flower inset." It is these three motifs, which have been used for nearly a century on LVM's handbags, clothing, and jewelry, that are "incontestable" under the Lanham Act.

In October 2002, Louis Vuitton introduced four new collections of "multicolored patterns and styles of handbag and accessory designs based upon [the Toile marks]," one of which featured the Multicolore mark. The Multicolore mark consists of the Louis Vuitton Toile Monogram pattern in 33 colors on either a white or black background and includes the four-leafed flower inset and the positive and negative of the curved diamond with a four-point star inset. As previously mentioned, the Multicolore mark, which includes visual elements of LVM's registered Toile trademarks (including the "four-leafed flower inset"), has become "extremely popular," but is currently unregistered.

In the United States, both the Toile and the Multicolore LVM handbags are sold in more than 90 Louis Vuitton stores, as well as through LVM's affiliated website, www.eluxury.com. LVM bags are also available at "exclusive department and specialty retail stores" such as Neiman Marcus, Macy's, Bloomingdale's, and Saks Fifth Avenue. To date, LVM has sold over 47,000 of its Multicolore bags in the United States, with sales totaling over $25 million.

Defendant-Appellant Burlington Coat Factory ("BCF") is a discount clothing and accessory retail chain with 341 retail stores in 42 states. BCF also conducts extensive commerce through its website, www.bcfdirect.com. Burlington has become famous for selling name-brand fashions and accessories at discount prices. At the time relevant to this lawsuit, BCF's website claimed to sell "the very best designer and famous label fashions, 20% - 60% off department store prices." See www.bcfdirect.com (via www.archive.org capture, October 2003). But despite the presence of other famous fashion brands, LVM has never sold its Toile or Multicolore bags in BCF's stores or on BCF's website.

On October 10, 2003...

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