Happy Easter from the AmeriKat II: Gucci v Guess, USPTO and ITC news

Gucci v Guess trial kicks off in Manhattan


For the past three years, luxury Italian fashion brand Gucci has been in a trade mark infringement dispute with mid-market fashion brand, Guess, over Guess's products which incorporate various Gucci trade marks and get-up such as Gucci's notable green and red strip design (US Trade Mark No.s 1, 483,526 and 1, 122, 789), the "square G" design (US Trade Mark Nos. 3,037,082, 2,214,272 and 2,042,805) the interlocking "G" design (US Trade Mark Nos. 1,107,311 and 1,106,722) and the interlocking "G" pattern (US Trade Mark Nos:  3,072, 549; 3,072,547; 2,680,237).   ["Its all a bit too much branding for my taste", the AmeriKat sighs, rolling over onto her unbranded Ralph Lauren cashmere throw.]

Last week, the parties finally met for trial in a Manhattan District Court before Judge Shira Scheindlin.  

Gucci

Gucci's lawyer, Louis Ederer, described Guess's activities to the judge as "a massive, complicated scheme to knock off Gucci's best-known and iconic designs."  According to this article in Bloomberg, Mr. Ederer suggested that Guess's infringing products amounted to around $221 million.  Gucci is seeking $124 million in damages.   

In their defence filings, Guess argued that Gucci was barred from claiming infringement as it "sat on its rights" in respect of one of the products for at least 7 years before bringing suit against Guess.  Further, and more interestingly for us IP lawyers, Guess said that Gucci's confusion surveys failed to prove that the average consumer would be mislead by Guess's designs.  Guess's lawyer, Daniel Petrocelli, told the court during his opening submissions that of the 1,495 claimed infringing products, 99% "could never be confused with Gucci".  Notably, as was argued, consumers for the Guess products are young women who cannot afford Gucci's luxury prices; Guess's item's sell for less than $100.  Another difference, Petrocelli is reported to have stated according to WWD, is that "Gucci uses leather, Guess uses plastic."

Guess

Last week, Guess's CEO Paul Marciano took to the witness stand.  After being cross-examined for four hours ["Which definitely isn't that long in the scheme of things", says Merpel, "Try four days!"] Marciano stated that the patterns and design used by Guess were not proprietary of Gucci alone, but were inspired from the common design corpus of the world of fashion in general.  However, Gucci's lawyers pointed to emails between Guess buyers and employees at the company's footwear manufacturer - Marc Fisher- which apparently made references to Gucci's product.


Of course, there is still that pesky little confusion test for Gucci, which in the Second Circuit is the Polaroid Crop v Polarad Elecs Corp (1961) test (see test here as applied to another famous shoe battle, Louboutin v YSL).  But even with probably good chances on the strict confusion aspects (evidence of, proximity of goods,quality of the goods, sophistication of the consumers, etc) the AmeriKat wonders if these e-mails will help seal the deal against Guess on at least one of the elements of the confusion test - whether or not the junior sign adopted the senior mark in good faith.   The case continues.    


USPTO proposes new trial rules

Under the new and improved patent laws to take effect under the Leahy-Smith America Invents Act, the USPTO  published back in February ["Yes, I know" says the AmeriKat, "this news is a bit delayed."] the proposed consolidated rules for trial practice before the Patent Trial and Appeal Board.  The rules relate to inter partes review, post-grant review, the transitional program for covered business method patents and derivation proceedings.  Under statute, these proceedings, save for the derivation proceedings, must be completed within one year from the proceedings being initiated.  As such, the proposed rules are tailored in order to facilitate the quick resolution of the proceedings.  The purpose of the one-year time limit and the rules is that with quicker patent owners, investors, and third parties will have greater certainty as to the scope of patents rights, without need to litigate in the federal court system.  USPTO Director David Kappos stated: 

“Since the enactment of the Leahy-Smith America Invents Act, we have worked in concert with our stakeholder community to launch transformative initiatives to improve the way Americans innovate, and the way the USPTO handles those innovations.  These new rules will offer an alternative way to challenge the patentability of an invention apart from district court litigation.”

Accompanying the proposed rules, is a Trial Practice Guide which sets out the general framework of the proposed regulations, structure and timescales for each of the new proceedings.  Now that the rules have officially been published on the Federal Register, there is a 60-day period where the public can comment on the rules and provide feedback to the USPTO.  If her math is right, the AmeriKat believes this expires tomorrow!  The new procedures and proceedings are due take effect on 16 September 2012.

The two new PTO reviews – inter parties review and post-grant review – permits for limited discovery.  With new rules and procedures, as the lawyers amongst us know, there will be a few initial years of fighting to determine the scope and extent of discovery permitted in the new proceedings. 

2011 – a bumper year for IP-related ITC complaints

In 2011 a record number of new IP-related investigations were filed at the US International Trade Commission (ITC) according to its press release issued last month, with 70 new investigations issued in 2011 compared to 51 in 2010.  Under section337 of the Tariff Act, the ITC investigates allegations of unfair practices in import trade, usually relating to allegations of patent infringement, but also other forms of IP. 

In what seems to be another federal agency’s push to be more efficient the average completion time from starting an ITC complaint to a decision of violation/no violation is 13.7 months.  This is a decrease of almost 5 months from the previous year.  The ITC complaint procedure is a favorite tactic by parties because in a relatively short amount of time, usually in a year or less, the ITC can issue exclusion orders which prohibit infringing products from entering the United States.  Such relief in such a short amount of time by way of the ITC procedure has, in recent years, found fans in the parties to the mobile patent disputes – which may have something to do with 2011’s spike in ITC complaints.  As readers will know, the ITC complains procedure is finding favor in the ever ongoing mobile patent war battles with several ITC complaints currently pending in relation to mobile devices.