When can a court’s judgment for intellectual property infringement prevent a party for being sued again for the same type of conduct? In Marcel Fashions Group v. Lucky Brand Dungarees, Inc., the Second Circuit Court of Appeals explored such an issue. Both parties to the case make jeans, with the plaintiff (“Marcel”) owning a federal registration for the mark “Get Lucky” and the defendant (“Lucky Brand”) owning a federal registration for the trademark “Lucky Brand.”
The parties have been previously involved in multiple rounds of litigation over the Lucky Brand’s infringement of the mark “Get Lucky.” In 2003, this litigation resulted in a settlement forbidding Lucky Brand from using the mark “Get Lucky.” In 2005, another litigation ensued over Lucky Brand’s breach of the settlement agreement – Marcel emerged victorious, obtaining money damages against Lucky Brand for all breaches of the settlement since 2003 and a court injunction prohibiting Lucky Brand from using the mark “Get Lucky”; Marcel nevertheless failed to obtain injunctions against Lucky Brand’s use of other trademarks that include the word “lucky,” such as “Lucky Brand.” Leading to the present decision, Marcel and Lucky Brand clashed in litigation again in 2011, with Marcel once again suing Lucky Brand for money damages for infringement of the “Get Lucky” mark and seeking an injunction against the use of the mark “Lucky Brand”. Lucky Brand argued that all claims in this litigation have already been decided in 2005 – that Marcel has already been compensated for all breaches of the 2003 settlement and that Marcel already tried, but failed, to obtain the injunction; accordingly, Lucky Brand argued, the lawsuit should be dismissed.
The Court of Appeals refuted Lucky Brand’s arguments and allowed the case to proceed forward. First, the Court reasoned, there is no sense in construing the 2005 decision as awarding damages for acts of infringement that have not occurred yet at that point of time. The Court also ruled that failing to obtain an injunction in a prior action does not prevent one from seeking the injunction in a later case; on the contrary, if money damages are not enough to stop infringement, the need for the injunction becomes clearer. Thus, being found liable for infringement once does not immunize a party from being sued for new alleged acts of the same type of conduct.