A story of wins and losses: Vuitton loses a real case and wins a fake one

Fabio Angelini

The world of luxury items is a fascinating place. Where not always the rule of reason applies. Lets’ start from the following news (reported by the CNN)

CNN: PARIS, France (AP) -- Luxury goods maker Louis Vuitton has won a lawsuit that alleged a Britney Spears music video violated counterfeiting laws by showcasing a pink Vuitton-upholstered dashboard. Britney Spears was not found guilty, but her video "Do Something" violated counterfeiting laws.A Paris civil court ordered Sony BMG and MTV Online to stop broadcasting or marketing the video for "Do Something" in any form and fined them 80,000 euros ($117,000) apiece, a spokeswoman for Paris-based Louis Vuitton said Monday. The ruling was handed down last week. In the opening scenes of the video, Spears appears in the driver's seat of a hot pink Hummer floating on make-believe clouds. One shot shows fingers drumming on a dashboard covered with what looks like Vuitton's "Cherry Blossoms" design: dark pink blossoms on a pale pink, weblike background, embossed with the "LV" logo. The court did not find Spears herself guilty but ruled that Sony BMG and MTV Online were guilty of violating counterfeiting laws. The ruling said the video constituted an "attack" on Louis Vuitton's brands and its luxury image, the spokeswoman said. It was not immediately clear how the ban would be enforced, or whether the companies would appeal. MTV declined to comment on the ruling. Sony BMG did not immediately respond to requests for comment.”

What a sad story. It is clear at least to me, that Britney Spears may be guilty of all things, not of trademark infringements: even though the dashboard was covered with what looks like Vuitton's "Cherry Blossoms" design, it was clearly a use not in a distinctive, trademark-wise manner. It was a parody! I suspect that Vuitton did not bring the lawsuit in the US (which would have been the right place: after all Britney was America’s darling once), perhaps because it knew very well that under the Trademark Dilution Revision Act (TDRA) of 2006, it would lose.

On the other hand, when Vuitton might have some real serious reason to object, it ended up losing. In a bizarre twist of fate, almost contemporaneously to the French case, the US Court of Appeal, 4^th District, on November 13 decided the appeal on the LOUIS VUITTON MALLETIER S.A., v. HAUTE DIGGITY DOG, LLC. case. Quickly summarized, the defendant, HAUTE DIGGITY DOG is in the pet accessories business. It uses variations of well known marks to identify its various products. Among these, for a line of dog related products, it sells the adorable CHEWY VUITTON.

Vuitton sued, and lost in first degree. The Court found no likelihood of confusion and no dilution, arguing that use of the CHEWY VUITTON name was a parody and as such fell under the fair use exception of the TDRA. Vuitton appealed and INTA (the International Trademark Association) intervened and filed a brief amicus curiae arguing that the Court had misapplied the TDRA.

The 4^th Circuit affirmed the verdict, even though it corrected the lower court on the dilution’s claim and analysis: while the lower Court had basically used the parody as absolute defense, the 4^th Circuit correctly remarked that “parody” works as a defense only if the famous mark is not used as a trademark : “Under the statute’s plain language, parodying a famous mark is protected by the fair use defense only if the parody is not "a designation of source for the person’s own goods or services." At pag. 19.

Since HAUTE DIGGITY DOG was using CHEWY VUITTON as a trademark, i.e. as an indicator of origin, the defense of parody in itself was unavailable. However, the 4^th Circuit held that parody is a factor to be examined in determining whether or not a dilution claim is sustainable in relation to the blurring or tarnishment of the well known mark.

It is important to note that unlike the EU approach to protection of famous marks, where dilution occurs under the paramaters of unfair advantage/detriment, the US approach (in my view derived by the language of art. 16(2) of Trips, which protects against dilution “provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use”) only focuses on the detrimental aspects of the dilution, i.e. dilution by blurring and dilution by tarnishment.

The 4^th Circuit held that since parody is a factor in determining dilution by blurring.: “….the facts impose on LVM an increased burden to demonstrate that the distinctiveness of its famous marks is likely to be impaired by a successful parody. Even as Haute Diggity Dog’s parody mimics the famous mark, it communicates simultaneously that it is not the famous mark, but is only satirizing it. See PETA, 263 F.3d at 366. And because the famous mark is particularly strong and distinctive, it becomes more likely that a parody will not impair the distinctiveness of the mark. In short, as Haute Diggity Dog’s "Chewy Vuiton" marks are a successful parody, we conclude that they will not blur the distinctiveness of the famous mark as a unique identifier of its source”. At pag. 20.

In short, the existence of a successful parody basically does not harm the distinctiveness of the well known mark, actually makes it stronger. So why is that I feel that famous marks owners are not so happy about this decision?

P.S. In another part of the decision, which however is to be considered a dicta, the 4^th Circuit said something else which is quite interesting. Since this is already too long I’ll refrain from discussing it, but if anyone is interested, post a comment and I’ll gladly offer my additional comments.