Parody Defense: No Laughing Matter for Brand Owners. Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252 (4th Cir.

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1 Parody Defense: No Laughing Matter for Brand Owners Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252 (4th Cir. 2007) 1 By Sherry H. Flax In Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC,. 507 F.3d 252 (4th Cir. 2007), the United States Circuit Court for the Fourth Circuit ( Fourth Circuit or Court ) dealt for the first time with a claim for violation of the Trademark Dilution Revision Act of 2006 ( TDRA ), 15 U.S.C.A 1125(c) (West Supp. 2007), by Louis Vuitton S.A. ( LVM ), a luxury fashion designer, against Haute Diggity Dog ( Haute ), a small pet toy company. The Court affirmed the district court s ruling on summary judgment that a pet chew toy that closely resembles LVM s luxury handbags was a successful parody. The Court applied the factors laid out in the TDRA in concluding that the parody mark was not likely to dilute the famous mark because similarities between the handbags and the dog toy were not too close as to destroy the parody and dilute the value of the famous and distinctive Louis Vuitton mark. THE DISTRICT COURT CASE LVM, a Paris based manufacturer of luxury luggage, handbags, and accessories, including dog collars, leashes, and pet carriers, filed suit in the United States District Court for the Eastern District of Virginia against Haute, a Nevada corporation that manufactures and sells luxury pet products. The suit alleged: (1) trademark infringement under 15 U.S.C 1114(1)(a); (2) trademark dilution under 15 U.S.C. 1125(c); (3) copyright infringement under 17 U.S.C. 501; and (4) related statutory and common law violations. The item in question was a small plush dog s chew toy, labeled as Chewy Vuiton that resembled a LVM handbag. 2 On cross-motions for summary judgment, the district court ruled in favor of Haute on all of LVM s claims. Namely, the district court ruled that the conclusion that Haute s product was a successful parody of the LVM products was sufficient as a matter of law to defeat LVM s claims. The Fourth Circuit affirmed the district court s ruling based on a slightly different analysis. 2 The company also manufactures other items based on famous brands: Chewnel No. 5 (Chanel No. 5); Furcedes (Mercedes); Jimmy Chew (Jimmy Choo); Dog Perignonn (Dom Perignon); Sniffany & Co. (Tiffany & Co.); and others. 1 Sherry Flax is a Partner with Saul Ewing LLP s Intellectual Property Practice Group and is Chair of the Publications Committee of the MSBA Intellectual Property Section. 2 The company also manufactures other items based on famous brands: Chewnel No. 5 (Chanel No. 5); Furcedes (Mercedes); Jimmy Chew (Jimmy Choo); Dog Perignonn (Dom Perignon); Sniffany & Co. (Tiffany & Co.); and others.

2 ANALYSIS OF THE FOURTH CIRCUIT DECISION A. Trademark Infringement Claim LVM argued that the marketing and sale of the dog toy bearing the Chewy Vuiton name infringed its trademark because there was a strong likelihood of confusion. For a holder of a trademark to succeed on this claim, it must show: (1) that it owns a valid and protectable mark; (2) that the defendant uses a reproduction, counterfeit, copy, or colorable imitation of that mark in commerce and without the holder s consent; and (3) that the defendant s use is likely to cause confusion. In this case, the first two prongs of this analysis were not in dispute. The Court noted that Haute s toys undisputedly evoke LVM handbags of similar shape, design, and color. In lieu of the LOUIS VUITTON mark, the dog toy uses "Chewy Vuiton"; in lieu of the LV mark, it uses "CV"; and the other symbols and colors employed are imitations, but not exact ones, of those used in the LVM Multicolor and Cherry designs. The court went on to discuss whether the Chewy Vuiton dog toy was likely to cause consumer confusion. Likelihood of confusion is based on: (1) the strength or distinctiveness of the plaintiff s mark; (2) the similarity of the two marks; (3) the similarity of the goods or services the marks identify; (4) the similarity of the facilities the two parties use in their businesses; (5) the similarity of the advertising used by the two parties; (6) the defendant s intent; and (7) actual confusion. Pizzeria Uno Corp. v. Temple, 747 F.2d 1522, 1527 (4th Cir. 1984). Haute argued, and the Court agreed, that the parody nature of its product should be considered when evaluating these factors. A parody is defined as a simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the mark s owner. People for the Ethical Treatment of Animals v. Doughney ( PETA ), 263 F.3d 359, 366 (4th Cir. 2001) The Fourth Circuit agreed with the district court in concluding that Haute s product was a successful parody of the 31

3 LVM product. The court explained that the Haute product was an obvious irreverent representation of the original that immediately conveys a joking and amusing parody. Next, the court concluded that the differences between the original and the copy were obvious and immediate. Lastly, when it compared the similarities and differences between the two products, the court found that the Chewy Vuiton product immediately conveyed a joking parody because a luxury item is not meant to be chewed by a dog. A successful parody influences the application of the Pizzeria Uno factors. In applying the factors, the Court heavily weighed the fact that the Chewy Vuiton product was a successful parody. The court finally held that LVM failed to demonstrate the likelihood of confusion between the two products. B. TDRA Claim LVM alleged that the Chewy Vuiton dog toy would blur and dilute the LVM trademarks because it is likely to impair the distinctiveness of the mark. LVM argued that the successful parody should automatically give rise to an actionable dilution claim. Haute argued exactly the opposite: that a finding of a successful parody should be a complete bar to a TDRA claim. The court concluded that neither of these arguments were sound and looked to the statute for guidance. The recent revision to the TDRA provides in part: Subject to the principles of equity, the owner of a famous mark... shall be entitled to an injunction against another person who... commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury. 15 U.S.C.A. 1125(c)(1). The statute defines famous as widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark s owner. Id. 1125(c)(2)(A). The statute also provides a definition for dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. Id. 1125(c)(2)(B). Lastly, the statute provides a definition for dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark. Id. 1125(c)(2)(C). must show: The Fourth Circuit articulated a four-prong test for stating a claim under the TDRA. The plaintiff 32

4 1. that the plaintiff owns a famous mark that is distinctive; 2. that the defendant has commenced using a mark in commerce that allegedly is diluting the famous mark; 3. that a similarity between the defendant s mark and the famous mark gives rise to an association between the marks; and 4. that the association is likely to impair the distinctiveness of the famous mark or likely to harm the reputation of the famous mark. Louis Vuitton, 507 F.3d at The court noted that the distinctiveness of a famous mark, in the context of blurring, refers to the ability of the famous mark uniquely to identify a single source and thus maintain its selling power. Id. at 265. The Fourth Circuit explained that the first three elements of a TDRA claim were not at issue in this case because: (1) the LVM mark is distinctive; (2) Haute is using the mark in commerce; and (3) there is a similarity between the two marks. Thus, the only element at issue was whether the association between the two marks is likely to impair the distinctiveness or harm the reputation of the mark. Under the TDRA, all relevant factors should be considered. The statute provides a non-exhaustive list of factors to be used as guidance when considering whether use of a mark blurs another mark: (i) The degree of similarity between the mark or trade name and the famous mark. (ii) (iii) (iv) (v) (vi) The degree of inherent or acquired distinctiveness of the famous mark. The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark. The degree of recognition of the famous mark. Whether the use of the mark or trade name intended to create an association with the famous mark. Any actual association between the mark or trade name and the famous mark. 15 U.S.C.A. 1125(c)(2)(B). 33

5 The district court acknowledged the six factors but failed to apply them. Instead, it summarily concluded that the parody dog toy is not likely to blur the strength of the LVM marks. The Fourth Circuit gave short shrift to the factors, then reached the same conclusion as the district court. The Court began its analysis by deciding whether it should consider that the Haute product was a parody of the LVM product. It looked to the statutory language that explains that the court must look at all relevant factors including the six supplied. The court explained that because several of the factors invite an inquiry as to whether the defendant s use was a parody, the parody should be considered in determining whether the defendant s mark is likely to impair the distinctiveness of the famous mark. the fact that the defendant uses its marks as a parody is specifically relevant to factor (v) (whether the defendant intended to create an association with the famous mark) and factor (vi) (whether there exists an actual association between the defendant s mark and the famous mark) directly invite inquiries into the defendant s intent in using the parody, the defendant s actual use of the parody, and the effect that its use has on the famous mark. While a parody intentionally creates an association with the famous mark in order to be a parody, it also intentionally communicates, if it is successful, that it is not the famous mark, but rather a satire of the famous mark. See PETA, 263 F.3d at 366. Thus, the Court s conclusion that the Chewy Vuiton product was a successful parody was the single determinative factor in finding that the famous LVM marks were not diluted. Curiously, the Court went on to raise the burden of proof on LVM because the very facts that established its dilution claim impose on LVM an increased burden to demonstrate that the distinctiveness of its famous marks is likely to be impaired by the successful parody. Louis Vuitton, 507 F.3d at 267. The Court reasoned that the strength of LVM s marks makes it more likely that Haute s use would not impair the distinctiveness of the mark. CONCLUSION The Fourth Circuit stopped short of holding that parody is a complete defense to a TDRA claim. However, this decision indicates that it will be very difficult for the owner of a particularly strong famous mark to prevail on a dilution claim under the TDRA based on parody. 34