MOOSE mark injunction decision shot down by Ninth Circuit

In Abercrombie & Fitch Co v Moose Creek Inc (Case 06-56774, May 22 2007), the Ninth Circuit has reversed the denial of a motion for a preliminary injunction. One basis for the reversal was the district court's improper application of judicial estoppel.

The parties had previously engaged in litigation concerning their respective moose design logos and MOOSE marks and had reached a settlement that delineated their respective rights going forward. One year later, defendant Moose Creek Inc introduced two new logos that plaintiff Abercrombie & Fitch Co alleged infringed its trademarks and breached the settlement agreement. In denying Abercrombie's motion for a preliminary injunction, the district court held that a number of Abercrombie's arguments were barred by judicial estoppel as being contrary to positions taken in the prior litigation.

In particular, the district court found that Abercrombie had argued in the earlier case that Moose Creek (then in position of plaintiff) was entitled to only a limited scope of rights due to the crowded field of similar moose word and design marks. On appeal, the Ninth Circuit held that the application of judicial estoppel on this point was an abuse of discretion because the field in question had changed and thus so had the determination as to how crowded the field was. Specifically, the prior litigation involved both word and design marks, but the current litigation involved only design marks. Thus, the field had become narrower. Additionally, Abercrombie's enforcement efforts had resulted in the abandonment of some previously competing moose images, thereby lessening the crowdedness of the field. Accordingly, Abercrombie's argument that its moose image was strong, even though it had previously argued that Moose Creek's marks were weak, was consistent.

The court also found that it was consistent for Abercrombie to argue that the consumers in the prior litigation were sophisticated, but that consumers in the current litigation exercised less care. Once again, the facts had changed from one law suit to the next. In the prior case, the relevant purchasers were Moose Creek's professional commercial clothing buyers. In the current action, however, the proper analysis required consideration of Abercrombie's customers, who are end-user consumers. Thus, the district court's application of judicial estoppel was an abuse of discretion, because Abercrombie's arguments were consistent, reflecting the changed circumstances of the different cases.

In another instance, the district court estopped Abercrombie from arguing that there was post-sale confusion between the respective marks. The issue of post-sale confusion had not been raised in the prior litigation, such that application of judicial estoppel was an abuse of discretion.

The Ninth Circuit did not reverse the application of judicial estoppel to Abercrombie's arguments concerning Moose Creek's likelihood of expansion of its product lines. In the prior litigation, Abercrombie had argued that the parties focus on different customers, (ie, Abercrombie sales to end-users as opposed to Moose Creek's sale to retailers). Evidence introduced by Abercrombie that Moose Creek had since started a website and was selling products to JC Penney (a well-known retailer) failed to rebut the inconsistency of the argument, such that application of judicial estoppel was not an abuse of discretion.

On a separate issue, the Ninth Circuit also disagreed with the manner in which the district court compared the respective marks, finding it clearly erroneous to hold that the marks were more different than similar.

In view of the above noted errors, the Ninth Circuit vacated the decision denying the motion for preliminary injunction but declined to order that a preliminary injunction be granted. Rather, the case was remanded to the district court for further proceedings.

Karin Segall, Darby & Darby PC, New York