Stitch designs are not “identical or nearly identical”, says court

United States of America
In Levi Strauss & Co v Abercrombie & Fitch Trading Co (Case 07-03752, 2009 WL 1082175, April 22 2009), the US District Court for the Northern District of California has held that the use of a design on denim jeans that was not “identical or nearly identical” to another design did not constitute trademark dilution.
Since 1873, Levi Strauss & Co has manufactured and sold garments bearing its 'Arcuate' design, which generally consists of two parallel lines stitched in two arches meeting at a point in the middle of the back pocket of denim jeans. Levi Strauss has not only registered this design as a trademark on the Principal Register, but it also employs an enforcement programme by which it protects its rights in the mark against uses of pocket stitching that are adopted by others. 
In February 2006 Abercrombie & Fitch Trading Co began selling denim jeans with a back pocket stitching – the 'Ruehl' design – which generally consists of an embroidered script 'R' that is upside-down, with the legs of the 'R' extending to the edges of the jeans pocket. Several differences exist between the Arcuate and Ruehl designs. For example, the Ruehl design sits lower on the pocket than the Arcuate design, and the Ruehl design includes a swooping loop around the centre of the pocket, whereas the Arcuate design does not. 
Levi Strauss sued Abercrombie for trademark infringement, unfair competition and trademark dilution in violation of federal and state law. Levi Strauss later withdrew its state law claims, and the federal trademark infringement and unfair competition claims were tried to a jury, which rendered a verdict against Levi Strauss on December 22 2008. Although the district court sought advisory opinions from the jury on certain factual issues related to the dilution claim, the court itself decided this claim.
Using the five-part trademark dilution test, the court determined that Abercrombie had not made commercial use of an “identical or nearly identical trademark”, a requirement to prevail on a claim of dilution by blurring. First, the court cited the Ninth Circuit standard that to be “nearly identical”, the two marks at issue must “be similar enough that a significant segment of the target group of customers sees the two marks as essentially the same” - a standard of similarity that is more stringent than in an infringement case. Applying this standard, the court reasoned that even if the Arcuate design were a strong and distinctive mark, the facts in this case were not such that the two marks at issue involved “only minor differences” - that is, the Ruehl design was not “virtually indistinguishable” from the Arcuate mark. Observing the various differences between the parties’ respective designs, the court held that Abercrombie did not incorporate the Arcuate mark into the Ruehl design as a “separate, visually identifiable element”. Moreover, the court gave little weight to the recognition survey conducted by Levi Strauss’s expert. Thus, the court determined that Levi Strauss presented insufficient evidence that a significant segment of the target group of consumers would view the parties’ respective designs as “essentially the same” and held that Abercrombie was not liable for trademark dilution.
This decision affirms the Ninth Circuit’s stringent standard in the context of trademark dilution claims under the Trademark Dilution Revision Act for showing that two marks are “identical or nearly identical”. Under this standard, it is insufficient that two marks are merely similar. Rather, to meet the requirement of the “identical or nearly identical” element of the trademark dilution test, the marks must be “essentially the same.”

Susan Progoff and Margaret C Lu, Ropes and Gray LLP, New York

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