December 2013 Issue

Civil Cases

Levi Strauss & Co. v. Abercrombie & Fitch Trading Co.,
719 F.3d 1367 (Fed. Cir. June 18, 2013)
by Eleanor Aktins*

CASE SUMMARY

FACTS
Levi Strauss & Company (“Levi”) owns multiple federally registered trademarks for the “Arcuate” stitching design used on the back pockets of its jeans, having used the bow-shaped pattern as a source identifier since 1873.  In 2005, Abercrombie & Fitch Trading Co. (“Abercrombie”) applied to register a “mirror image stitching design” on the Principal Register for jackets and on the Supplemental Register for jeans, skirts, and pants.  Levi opposed Abercrombie’s application for registration on the Principal Register and petitioned to cancel Abercrombie’s registration on the Supplemental Register, arguing the design was likely to cause confusion and to dilute Levi’s mark.  Levi then sued Abercrombie in the Northern District of California, alleging that jeans with the “mirror image stitching design,” specifically, Abercrombie’s “Ruehl” line of jeans, infringed and diluted its trademarked pattern.  The PTO stayed the opposition and cancellation proceedings pending resolution of the district court litigation. 

ANALYSIS
In 2009, the district court ruled for Abercrombie on both infringement and dilution.  Levi appealed the 2009 judgment on dilution to the Ninth Circuit Court of Appeals, which reversed and remanded.  During the appeal, Abercrombie discontinued its Ruehl brand and filed a new trademark application for the same stitching design to be used on clothing, namely, bottoms for its Gilly Hicks brand.  Back at the district court, Levi requested that Abercrombie agree to include its Gilly Hicks line for consideration.  Abercrombie refused, and the district court denied Levi’s subsequent request to amend its complaint.  Levi thus voluntarily dismissed the case, and the district court dismissed Levi’s claim for dilution in 2011. Abercrombie then filed for summary judgment at the PTO, arguing that claim and issue preclusion barred Levi’s challenges to Abercrombie’s marks.  The TTAB granted summary judgment for Abercrombie, finding issue preclusion but not claim preclusion, and barred Levi’s opposition and cancellation proceedings due to the district court litigation.

On appeal, the Federal Circuit reversed the TTAB’s decision, holding that neither issue preclusion nor claim preclusion barred Levi’s cancellation and opposition proceedings at the PTO.  In addressing issue preclusion, the Federal Circuit held that the 2009 judgment on dilution could not support either form of preclusion because the decision was reversed on appeal, and thus was not “an extant final judgment on the merits, as required for claim preclusion.”  Additionally, the 2011 judgment on dilution had no issue-preclusive effect because it was voluntarily dismissed, and thus did not decide any specific issue.  The only adjudication potentially sufficient for issue-preclusion purposes was the 2009 judgment on infringement.  However, even this did not bar the opposition and cancellation determinations because the PTO proceedings involved a broader set of issues than those presented and adjudicated in the district court.  For example, the infringement action only considered specific products, comparing the Ruehl brand of jeans to Levi’s protected trademarks.  In contrast, the TTAB proceedings involved confusion with respect to all goods for which Abercrombie sought registration, namely, jeans, skirts, shorts, pants, and jackets.  Moreover, the infringement action was based in large part on how the goods appeared in the marketplace, whereas the PTO proceedings were not.

The Federal Circuit also held claim preclusion inapplicable, finding the TTAB proceedings and the district court proceeding did not involve the same transactional facts.  Rather, Levi’s dilution claim, like its infringement claim, challenged the uses of the stitching design that Abercrombie used on its Ruehl line of clothing, not the full range of goods that Abercrombie’s application and registration sought to cover.  The Federal Circuit reasoned that an alternative ruling would require owners of famous marks to litigate the entire range of potential uses for the allegedly infringing mark, even those uses that may be necessary for broad PTO registration, but that are irrelevant to the dilution claim.  Accordingly, the Federal Circuit held that neither issue preclusion nor claim preclusion prevented Levi’s challenges to Abercrombie’s mark, and reversed and remanded the case for further determination of the TTAB proceedings.

CONCLUSION
This ruling is noteworthy because it holds that neither issue preclusion nor claim preclusion bar a trademark challenge asserted at the PTO, despite previous district court litigation addressing dilution and infringement.

*Eleanor Atkins is a Law Clerk at Finnegan.