Louis Vuitton's infringement and dilution claims chewed up on appeal

In Louis Vuitton Malletier SA v Haute Diggity Dog LLC (Case 06-2267, November 13 2007), the US Court of Appeals for the Fourth Circuit has affirmed a district court decision dismissing Louis Vuitton Malletier SA's trademark infringement claims against Haute Diggity Dog LLC.

After losing before the district court on its trademark and copyright claims against Haute Diggity, the creator of inexpensive pet toys branded CHEWY VUITON that mimicked Louis Vuitton handbags, Louis Vuitton appealed to the Fourth Circuit. Louis Vuitton asserted that Haute Diggity's plush dog toys infringed its federal trademark and copyright claims and otherwise diluted its trademark rights under the Trademark Dilution Revision Act (15 USC §1125(c)).

The Fourth Circuit affirmed the district court's decision in all regards on the infringement claims. It reached the same conclusion as the district court, but on different grounds.

Writing the opinion of the unanimous panel, Judge Niemeyer recognized that the inexpensive CHEWY VUITON plush pet toys adopted the same look as Louis Vuitton handbags, which sold for thousands of dollars, bearing either smiling cherries on a brown background or initials in various colours against a white background. It was further undisputed that the trademarks used for Louis Vuitton handbags convey much notoriety. In addition to its luxury handbags, Louis Vuitton is well known as a manufacturer of luxury luggage. Significantly for this case, the court noted that Louis Vuitton also marketed a limited selection of luxury pet accessories that ranged in price from $200 to $1,600, but that it did not offer dog toys.

Under these governing facts, the court first rejected the notion that the CHEWY VUITON pet toys would create a likelihood of confusion under the Lanham Act (15 USC§1114(1)(a)). The court applied the test for parody set forth in People for the Ethical Treatment of Animals (PETA) v Doughney (263 F3d 359, 366, Fourth Circuit), stating that "parody must convey two simultaneous - and contradictory - messages: that it is the original, but also that it is not the original and is instead a parody". Under the PETA standard, the CHEWY VUITON dog toys successfully created a parody; the toys plainly imitated the Louis Vuitton bags, while at the same time suggesting a jokey element. Further, the court found that the parody was not confusing. It found that the differences in the brands were obvious to the consumer, relying on the readily apparent differences in the word marks CHEWY VUITON and LOUIS VUITTON, and the initial designs on the bags and toys.

As to the dilution claim, Louis Vuitton argued that the CHEWY VUITON products both tarnished and blurred Louis Vuitton's trademarks. Even assuming the marks to be famous, the court held that the strength of LOUIS VUITTON would not be blurred by the CHEWY VUITON parody toys. While the court recognized that parody is not automatically a complete defence to a dilution blurring claim, it held that parody constitutes a factor to be weighed in determining whether blurring can be established. A parody does not constitute fair use, but it can be considered as a material element in assessing the impairment of the distinctiveness of a mark. Because the CHEWY VUITON mark was not identical to the LOUIS VUITTON mark and the similarities between the two marks were otherwise limited, the court held that a finding of blurring had not been established as a matter of law.

In addition, focusing on the tarnishment element of the Trademark Dilution Revision Act, the court held that this claim did not withstand scrutiny. Louis Vuitton needed to demonstrate that the CHEWY VUITON toys harmed its reputation. The court found that Louis Vuitton had not provided evidence to support its assertion. Instead, it relied on speculation about whether a dog could possibly choke on the toys and an inference of inferior quality based on the low cost of the toys. However, the court found that this 'flimsy' theory did not provide sufficient evidence to demonstrate dilution by tarnishment as a matter of law.

Finally, in a summary manner, the court affirmed the dismissal of the copyright infringement claim as a matter of law. Agreeing entirely with the district court, the appellate court concluded that "use as a parody of certain altered elements of Louis Vuitton's design did not support a claim for copyright infringement".

Under the Fourth Circuit's interpretation of the Lanham Act, the Copyright Act and the Trademark Dilution Revision Act, parody products, if carefully created and marketed, can exist in the marketplace without harming even a well-known brand owner.

Rochelle D Alpert, Morgan Lewis, San Francisco