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Levi Strauss & Company v. Abercrombie & Fitch Trading Co.

United States Court of Appeals, Federal Circuit

June 18, 2013

LEVI STRAUSS & COMPANY, Appellant,
v.
ABERCROMBIE & FITCH TRADING CO., Appellee.

Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board Nos. 91175601 and 92049913.

Gregory S. Gilchrist, Kilpatrick Townsend and Stockton LLP, of San Francisco, California, argued for appellant. With him on the brief was Gia L. Cincone.

J. Michael Keyes, K&L Gates LLP, of Spokane, Washington, argued for appellee. With him on the brief was Whitney J. Baran. Of counsel was Bryan J. Sinclair, of Palo Alto, California.

Before Lourie, O'Malley, and Taranto, Circuit Judges.

Taranto, Circuit Judge.

Abercrombie & Fitch Trading Co. created a stitching design to use on clothing as a brand-identifying trademark. It sought to register the design with the Patent and Trademark Office for use on a wide range of clothing. It also began to use the new mark on one line of clothing. Levi Strauss & Co., which has used a trademark stitching design on the pockets of its jeans for a hundred years, challenged Abercrombie's mark in two forums. It sued Abercrombie in district court, alleging that the use Aber-crombie was then making of its new mark infringed and diluted Levi Strauss's old stitching-design mark. Levi Strauss also challenged Abercrombie's registrations at the PTO as covering uses likely to cause confusion with and dilution of Levi Strauss's mark.

After the district-court litigation ended, the PTO's Trademark Trial and Appeal Board dismissed Levi Strauss's registration challenges on the ground that the result of the district-court litigation barred the challenges in the PTO based on issue preclusion. Levi Strauss now appeals, and Abercrombie defends the Board's dismissal as justified by issue preclusion or, in the alternative, by claim preclusion. We reverse the dismissal. Ultimately because the registrations at issue in the PTO cover a much broader range of uses of the Abercrombie mark than were the subject of the district-court litigation, the results of the district-court case do not preclude Levi Strauss's challenges in the PTO. We remand for further proceedings.

BACKGROUND

Since 1873, Levi Strauss has stitched the back pocket of its jeans with two connecting arches that meet in the center of the pocket. Levi Strauss holds multiple federally registered trademarks on this "Arcuate" (bow-shaped) design and has extensively advertised products displaying the trademark for over a hundred years. Levi Strauss actively monitors use of competing stitching designs and enforces its trademark rights against perceived infringers.

In 2005, Abercrombie sought to register a "mirror image stitching design" for use on "[c]lothing, namely, jeans, skirts, pants and jackets." U.S. Trademark Application Serial No. 78766368 (filed Dec. 5, 2005). The registration stated no other limitations on the goods' nature, type, channels of trade, or class of purchasers. Id. Abercrom-bie subsequently divided the application. One, the parent, covered jackets and sought registration on the Principal Register; the other, the child, covered the remaining categories of clothing and sought registration on the Supplemental Register. After the parent application was published for opposition, Levi Strauss initiated Opposition Proceeding No. 91175601. The child application progressed into Supplemental Registration No. 3451669 without opportunity for Levi Strauss's opposition. Levi Strauss petitioned to cancel that registration, leading to Cancellation Proceeding No. 92049913. In both proceedings, Levi Strauss alleges that registration of Abercrombie's mirror-image design should be barred because the design, in the range of uses covered by the registration, is likely to cause confusion with and dilute the Levi Strauss Arcuate mark. See 15 U.S.C. § 1052(d) (likely confusion), § 1125(c) (dilution).

On July 20, 2007, after learning that Abercrombie was selling products that used the mirror-image design— the "Ruehl" line of jeans—Levi Strauss sued Abercrombie in the Northern District of California. Levi Strauss alleged, inter alia, that Abercrombie's use of the mirror-image design infringed the Levi Strauss Arcuate mark (15 U.S.C. §§ 1114-1117, 1125(a)) and was likely to dilute the Arcuate mark (15 U.S.C. § 1125(c)).[1] The PTO then stayed the opposition and cancellation proceedings pending disposition of the civil action.

The district court held a jury trial in December 2008, with the jury to render a decision on the infringement claim and an advisory opinion on the dilution claim (as to which Levi Strauss sought only injunctive relief). At trial, a significant aspect of Abercrombie's defense was that its Ruehl line of jeans and Levi Strauss products were sold in such different channels and at such different prices that the former could not cause the alleged kinds of harm to the latter. See, e.g., Dec. 22, 2008 Trial Transcript at 613, Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., No. 07-03752 (N.D. Cal. Dec. 22, 2008), ECF No. 350 ("[Y]ou don't have the same channels. Ruehl jeans are sold in Ruehl stores. No Levi's are sold in Ruehl stores. Levi's are sold in Kohl's, Penney's, Macy's."); Dec. 18, 2008 Trial Transcript at 52, Levi Strauss & Co. v. Aber-crombie & Fitch Trading Co., No. 07-03752 (N.D. Cal. Dec. 18, 2008), ECF No. 338 (arguing that the prices are "just different for these types of jeans").

In December 2008, the jury returned a verdict that Abercrombie's Ruehl-line uses of its mirror-image design did not infringe the Arcuate mark. In April 2009, the district court, deciding the dilution claim after the jury's advisory verdict on that claim, ruled that Levi Strauss failed to prove dilution by blurring of its Arcuate mark. On April 22, 2009, the district court entered judgment in favor of Abercrombie on both claims—which it is useful to describe as two judgments: the 2009 Judgment on Infringement and the 2009 Judgment on Dilution.

Levi Strauss did not appeal the 2009 Judgment on Infringement, which therefore became the final judgment on infringement in the case. Levi Strauss did appeal the 2009 Judgment on Dilution. In 2011, the Ninth Circuit "reversed" that judgment, and remanded the case. Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., 633 F.3d 1158, 1175 (9th Cir. 2011). The Ninth Circuit held that dilution by blurring does not require identity or near identity of the marks at issue (id. at 1162-73) and that the district court's reliance ...


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