Levi Strauss & Co. V. Abercrombie & Fitch Trading Co. 633 F.3d 1158 (2011)
FACTS: Levi Strauss has stitched a design on the back pockets of its jeans since 1873. Levi Strauss holds multiple federally registered trademarks on this bow-shaped design, an “Arcuate”. They are required to actively monitor competing designs and enforce its trademark rights. In 2005, Abercrombie & Fitch attempted to register a “mirror” image stitching design for use on certain products. Levi Strauss argued that this design should be barred because it could potentially cause confusion with and dilute the Levi Strauss Arcuate mark. While the ninth circuit appeal was pending, Abercrombie announced the shutdown of the Ruehl brand and the Ruehl retail stores. Abercrombie then proceeded to file a new trademark-registration application with the PTO. This time they were attempting to register the same mirror image with a different brand name, Gilley Hicks. These would be sold at different prices, and through different channels than their former Ruehl line. After this, Levi Strauss attempted to have Abercrombie agree to amend the pleadings to add Gilley Hicks, or say that any injunction occurred would extend to include the Gilley Hicks line as well; Abercrombie refused.
PROCEDURAL HISTORY: On July 20, 2007, Levi Strauss sued Abercrombie in the Northern District of California after learning that Abercrombie was selling products with this mirror image on a line of jeans- the “Ruehl”. The district court held a jury trial in December of 2008. The defendants argued that their line of jeans and Levi Strauss products were sold in different channels and at such different prices as to which they could not cause any harm to Strauss. The Jury returned a verdict that Abercrombie’s Ruehl-line uses of its mirror-image design did not infringe the Arcuate mark. In 2009, the district court ruled in favor of Abercrombie on both claims- the judgment on infringement, and the judgment on dilution. The 2009 judgment on infringement was the final judgment. Levi Strauss appealed the 2009 judgment on Dilution. When Abercrombie refused to include Gilley-Hicks to the issues at hand, Levi Strauss moved to voluntarily dismiss its dilution claim. The district court entered judgment against Levi Strauss dismissing the claim with prejudice. The 2011 dismissal on the Dilution case in district court was the final decision on Dilution. Strauss’ petition to bar Abercrombie from registering the design with the new Gilley-Hicks line was dismissed after the district court litigation ended. Strauss appealed the dismissal to the Federal Circuit.
ISSUES: Whether Abercrombie & Fitch violated a copyright infringement on Levi Strauss’ Arcuate design? Did issue preclusion bar Strauss’s challenges in the PTO proceedings?
HOLDING: Dismissed. Reversed and Remanded.
REASONING: Strauss lost its case on infringement due to the fact that Ruehl products would be sold at different prices and different locations than Strauss, leading to no confusion of the Arcuate. Abercrombie then attempted to register a broad class of goods without providing limitations. The scope of the new registration exceeds what the parties had litigated in the district courts. Due to the broader scope Strauss may show that other uses covered by the new registrations may cause confusion of the brand. The court held that “array of differences in transactional facts conclusively demonstrates that claim preclusion cannot serve to bar.” Also, when Strauss asked Abercrombie to agree that any injunctions issued if Strauss won the claim would extend beyond the Ruehl products, Abercrombie refused. That refusal confirms that the case on dilution was limited to the Ruehl line, with other possible Abercrombie uses raising distinct issues. Because the board erred in ruling on issue preclusion, the court reversed and remanded the case.