799 F.2d 867 (2nd Cir. 1986), 880, Lois Sportswear, United States, Inc. v. Levi Strauss & Co.

Docket Nº:880, Dockets 85-7880, 85-7976.
Citation:799 F.2d 867
Party Name:230 U.S.P.Q. 831 LOIS SPORTSWEAR, U.S.A., INC., Plaintiff-Appellant, and Textiles Y Confecciones Europeas, S.A., Defendant-Appellant, v. LEVI STRAUSS & COMPANY, Defendant-Plaintiff-Appellee.
Case Date:August 27, 1986
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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799 F.2d 867 (2nd Cir. 1986)

230 U.S.P.Q. 831

LOIS SPORTSWEAR, U.S.A., INC., Plaintiff-Appellant,

and

Textiles Y Confecciones Europeas, S.A., Defendant-Appellant,

v.

LEVI STRAUSS & COMPANY, Defendant-Plaintiff-Appellee.

No. 880, Dockets 85-7880, 85-7976.

United States Court of Appeals, Second Circuit

August 27, 1986

Argued March 19, 1986.

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Max F. Schutzman, New York City (Whitman & Ransom, New York City, on brief), for appellants.

Alfred T. Lee, New York City (Milgrim, Thomajan, Jacobs & Lee, New York City, on brief), for defendant-plaintiff-appellee.

Before TIMBERS, MINER and ALTIMARI, Circuit Judges.

TIMBERS, Circuit Judge:

Lois Sportswear, U.S.A., Inc. and Textiles Y Confecciones Europeas, S.A. (collectively "appellants") appeal from a summary judgment entered September 30, 1985 in the Southern District of New York, Robert W. Sweet, District Judge, enjoining appellants from using a back pocket stitching pattern similar to the trademark jean back pocket stitching pattern of Levi Strauss & Company ("appellee") on appellants' jeans. The question presented by this appeal is whether summary judgment for the trademark owner is appropriate on claims of trademark infringement and unfair competition when the trademark owner has shown that a rival jeans manufacturer is using the trademark owner's registered back pocket stitching pattern trademark on its competing jeans, and the undisputed evidence shows that the trademark is intimately associated with the trademark owner's products in the minds of jeans consumers. We answer this question in the affirmative and affirm the judgment of the district court.

I.

We summarize only those facts believed necessary to an understanding of the issues raised on appeal.

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Appellee is a world famous clothing manufacturer. One of its most popular products is a line of casual pants known as Levi Jeans. Appellee began manufacturing its denim jeans in the 1850s. Each pair of jeans contains numerous identifying features. One such feature is a distinct back pocket stitching pattern. This pattern consists of two intersecting arcs which roughly bisect both pockets of appellee's jeans. Appellee has an incontestable federal trademark in this stitching pattern. See 15 U.S.C. Sec. 1065 (1982). Appellee has used this pattern on all its jeans continuously since 1873. In many ways the back pocket stitching pattern has become the embodiment of Levi Jeans in the minds of jeans buyers. The record is replete with undisputed examples of the intimate association between the stitching pattern and appellee's products in the buying public's mind. Not only has appellee spent considerable sums on promoting the stitching pattern, but various competitors have run nation-wide advertisement campaigns touting the advantages of their jeans' back pockets over appellee's. In addition, one of the largest chains of jeans retailers, the Gap Stores, has run numerous advertisements featuring pictures of appellee's back pocket stitching pattern as the entire visual portion of the ad. The record also contains numerous examples of the public's phenomenal reaction to the stitching pattern and the jeans it epitomizes. These examples range from national magazine cover stories to high school yearbook dedications.

Appellant Lois Sportswear, U.S.A., Inc. ("Lois") imports into the United States jeans manufactured in Spain by Textiles Y Confecciones Europeas, S.A. ("Textiles"). The instant litigation was commenced because appellants' jeans bear a back pocket stitching pattern substantially similar to appellee's trademark stitching pattern. On appeal appellants do not challenge the district court's conclusion that the two stitching patterns are substantially similar. Nor could they; the two patterns are virtually identical when viewed from any appreciable distance. In fact, the results from a survey based on showing consumers videotapes of the back pockets of various jeans, including appellants', indicate that 44% of those interviewed mistook appellants' jeans for appellee's jeans. 1 Appellants instead rely on their use of various labels, some permanent and some temporary, to distinguish their jeans and defeat appellee's trademark infringement and unfair competition claims.

The parties have clashed over appellants' use of a back pocket stitching pattern similar to appellee's trademark stitching pattern continuously since 1979. In that year appellee lodged a protest with the United States Customs Bureau concerning Lois' importation of Textiles' jeans. Appellee claimed that appellants' use of a back pocket stitching pattern similar to its trademark stitching pattern violated its trademark rights and was grounds for barring further importation. The Customs Service agreed and banned the continued importation of appellants' jeans in early 1980. On June 4, 1981, however, the Customs Service reversed itself and permitted renewed importation of appellants' jeans. This reprieve was short lived because on June 30, 1982 the Customs Service again reversed itself and once again banned the importation of appellants' jeans. On December 14, 1982 appellants, apparently tiring of the Customs Service's fickle attitude, commenced an action in the Court of International Trade against the Commissioner of Customs. This action sought an order enjoining the Customs Service from interfering with the importation of appellants' jeans. On May 3, 1983 the court, Bernard Newman, Judge, issued a preliminary injunction enjoining the Customs Service from banning the importation of appellants' jeans. The court held that the Customs Service

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had violated its own procedures in banning the importation of appellants' jeans.

Lois, leaving no stone unturned, also commenced the instant action in the district court on December 14, 1982. Lois sought a declaratory judgment that its use of the stitching pattern did not violate appellee's trademark rights. Appellee counterclaimed for injunctive and monetary relief, alleging that appellants' use of the stitching pattern constituted trademark infringement and unfair competition in violation of the Lanham Act, 15 U.S.C. Secs. 1114(1)(a), 1125(a) (1982). Finally, on June 8, 1983 appellee commenced a separate action against Textiles in the district court. Appellee's complaint tracked its counterclaim in the earlier declaratory judgment action. Textiles' answer and counterclaim tracked Lois' declaratory judgment complaint. The two actions were consolidated in the district court.

After extensive discovery, both sides moved for summary judgment. On July 12, 1985 the court held a hearing on the motions at which depositions, exhibits and memoranda were received. Most of the evidence sought to show that appellee's back pocket stitching pattern had achieved a strong secondary meaning, i.e., that jeans consumers associated the pattern with appellee's products. This evidence is undisputed for the most part. The remainder of the evidence is focused on the respective quality of the two products at issue and the likelihood that consumers somehow would confuse the source of appellants' jeans.

The evidence is undisputed that appellants and appellee manufacture and sell a similar product. While stratifying the jeans market with various styles and grades seems to be the current rage, there can be no dispute that the parties before us compete to sell their jeans to the public. The record does indicate that appellants have attempted to target their "designer" jeans at a decidedly upscale market segment. 2 There also was evidence, however, that appellants' jeans were selling at deep discount in cut-rate clothing outlets. Moreover, there was substantial evidence which indicated that appellee's jeans, although originally marketed as work pants, had achieved a certain elan among the fashion conscious. The evidence suggests that appellee's jeans have achieved fad popularity in all sectors of the jeans market. Finally, appellee produced affidavits stating that it was planning to enter the designer jeans market.

In short, the uncontested facts show that appellants' jeans exhibit a back pocket stitching pattern substantially similar to appellee's incontestable registered trademark back pocket stitching pattern. The record also makes plain that the stitching pattern is closely associated with appellee's jeans, and that appellants' use of the stitching pattern on arguably competing jeans at least presents the possibility that consumers will be confused as to the source of appellants' jeans or the relationship between appellants and appellee.

On September 30, 1985 the district court granted appellee's motion for summary judgment. The court held that, while appellants' labeling and trade dress prevented most possible consumer confusion as to source at the point of sale, appellants' use of a stitching pattern substantially similar to appellee's trademark stitching pattern was likely to cause confusion as to source when the jeans were observed in the post-sale context. The court also held that there was a likelihood that consumers mistakenly might assume that there was some sort of connection between appellee and appellants due to the similar stitching patterns. The court enjoined appellants from selling jeans bearing the similar stitching pattern. 3

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With these facts in mind, we turn to the relevant law of trademark infringement and unfair competition in our Court.

II.

Appellants' arguments, for the most part, focus only on the likelihood that consumers will buy appellants' jeans thinking they are appellee's jeans due to the similar stitching patterns. Appellants point to their labeling as conclusive proof that no such confusion is likely. We agree with the district court, however, that the two principle areas of confusion raised by appellants' use of appellee's stitching pattern are: (1) the likelihood that jeans consumers will be...

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