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UPDATE: Per Marty Schwimmer:
Hyundai ran a commercial with humorous depictions of what it would be like if luxury items were widely available. Policemen would eat caviar, yachts would be parked in driveways, and men would play basketball on a marble court with golden rims and a basketball bearing the Louis Vuitton ‘toile monogram.’ LV sues for dilution, and wins. Decision below.
Prof Goldman’s thorough discussion here.
A few initial reactions after one reading of the decision. The federal dilution statute enjoins ‘commercial use in commerce of a mark or trade mark. . .” Academics have argued for the importance of interpreting this clause to mean ‘use of a mark as a mark‘. Was the basketball used as a trademark? In what is clearly a car commercial, a character bounces a basketball for several seconds. Does the basketball communicate origin of anyone’s goods or services?
It does, it does — at least the Second Circuit thinks so.
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Louis Vuitton Malletier and its lawyers demonstrate how to make sure a few seconds of what they say is trademark dilution get a lot less diluted–they’re suing Hyundai over this commercial played at the Super Bowl. Now, concentrate:
(Download Luxury Made Available in the Hyundai Sonata)
I’m not trying to hide the ball. Far from it; take a look below and to the right–there’s your tort right there. Now Marty Schwimmer, who also picked up this story (and who has posted a copy of the complaint), demands of readers, “Spot The Lawsuit In This Commercial — (‘)(‘) <- me rolling my eyes.” Is Marty right? Is this civil action just an air ball?
The complaint is easy to make fun of, both as a legal matter and on sort of flat-footed “common sense” grounds. (Come on, it’s just a second or two on the screen! Come on, now everyone’s going to just see the commercial over and over again!) But that’s not entirely the same as saying it’s indefensible.* In fact, I think that while LVMH is shooting aggressively from beyond the three-point line, it is doing what it has to make sure its trademark rights don’t fade away.
First, though, let’s put the two dilution claims (federal and New York), which are the real meat here, aside. As I will urge below, there is a colorable, and arguably very winnable, argument for them. But first, the shootaround: Yes, it is time for me to put on my Professor Pendatic hat, unable as ever to resist needling good lawyers who have clients I’d also like to have and fully aware of my own lack of game, about the double-dribbles in their submissions.
The technical foul here is the fact that, besides trademark dilution, LVMH also sued Hyundai on three other legal theories: false designation of origin under Lanham Act’s section 42; common law trademark infringement under New York law trademark law; and infringement of LVMH’s registered trademarks.
A little practitioner’s hint: The last count in a multi-count commercial complaint can be viewed as meritless, mere ballast, about 95% of the time. I don’t believe in ballast, but lots of lawyers (about 95% of them) do. And as a trademark litigator who often represents defendants, when I see that the registered trademark infringement claim is the last one in the complaint, that tells me, “Oh, good, so there’s no trademark infringement here, at least.” And of course there isn’t; Hyundai doesn’t sell or offer either cars or basketballs bearing anything likely to be confused with an LVMH registered mark, plus a million other reasons.
Hey, wait though–what about the other two trademark claims? How about the section 42 and New York unfair competition claims, which are counts three and four? Well, sorry kids, but you can’t have three last counts! Only one can be the lastest. And big-boy trademark registration infringement, being usually the proudest and loudest thing you can sue an infringer for, as a matter of dignity obviously insisted on being discreetly tucked away at the end–damned to sitting next to the ad damnums but at least not exposed to the glare up front.
But if that’s the case, then why still throw in the other two non-registration-based trademark claims at all?
To answer that question, children, you’ll have to ask one of the other 95% of lawyers.
Now, having said all that, we are left with the dilution claims. So what justification can there be for filing this lawsuit at all? Well, what is dilution, after all? Dilution is the lessening of a famous mark’s capacity to identify and distinguish goods or services, regardless of whether the trademark owner and the defendant compete with each other and without regard to LIKELIHOOD OF CONFUSION. Fair use is not actionable as dilution, but typically this means fair use in comparative advertising. Isn’t this, really, a trademark use, then? Doesn’t Hyundai want you to say, “Ha ha, a Vuitton basketball!” No, it’s not selling a basketball, but it’s surely labeling one. Is this use a parody, perhaps? Mmm, maybe, maybe not. I don’t think so. So assuming that the marks are indeed confusingly similar (they seem to be), why isn’t this use of them, in fact, dilution by blurring? (I wouldn’t suggest they’re going for a claim based on dilution by tarnishment. Nothing unsavory about playing a little round-ball, is there?).
Let’s take a time out here and huddle around: LVMH, in fact, has a huge branding problem. It has built a brand (writ large) that is so successful, that is so symbolic an indicator, in fact, of success itself (why, it’s the Cadillac of brands! The Michael Jordan, even!), that its ability to maintain the commercial value of that brand could be the ultimate victim of that success. This success was even held against it in the dubious “Chewy Vuitton” decision–and that, it seems, is one move that LVMH is not going to get burned by twice.
What other recourse does the Malletier have to avoid its platinum trademarks becoming, despite their universal power as source indicators, a line of generic symbols of “luxury”? The answer may be that the law does not, or cannot, provide relief for such a unique situation. Maybe at a certain point the ref blows the whistle, culture has the last word, and you’re just plain cola, aspirin and google. So be it.
But LVMH can hardly be blamed, given the weapons at its disposal, for dedicating a bunch of them to this brand-management-by- litigation-signals game. Doing so imposes costs on defendants and would-be defendants who will seldom have embossed purses of sufficient size to defend. Is it wrong to fight till the buzzer against the death of your billion-dollar brand? IP litigation is not an appropriate vehicleto stake out, much less appropriate, what should be the free semiotic and even commercial territory surrounding legitimate trademark rights. Yet thanks to the Chewy Vuitton decision, the legal trend respecting LVMH’s unique brand threatens to get disturbingly deep “into the paint” and threaten the bona fide trademark protection due that phenomenally valuable brand. What else can LVMH do but play tenacious defense?
So unlike Marty, while it’s no layup I can’t say the LVMH dilution drive here is meritless. LVMH may or may not win its dilution case against Hyundai, but its dilution claims are not frivolous. And I can’t say the strategy in bringing them is any less legitimate than the full-court press you’d expect from a team with a lot at stake in keeping the ball as far away from their high-rent hoop.
UPDATE (March 13, 2012): Believe it or not, this case is still active in the Southern District of New York. A brief regarding the sealing of certain submissions in connection with a summary judgment motion was filed on September 15, 2011, and appears to still be pending in that slow-docket district.
UPDATE (April 9, 2012): See the call-out box at the top. LVMH survives the motion the motion for summary judgment. In addition to that of Marty and Eric, lots of unhappiness out there.)
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* I formerly (and, well, successfully) represented LVMH, but believe me, I have no illusions that I ever will do so again, so there is no bias here on my part.
I’m just wondering how the commercial cleared Hyundai (or the ad company’s) legal department. The rest of the commercial glaringly avoids brand references, even though luxury brands would have been any easy way to convey the message. So why was litigious LVMH the only one so blessed?
The thing I find most disturbing about LVMH’s Complaint is that the use is clearly fictional. Hyundai is clearly not selling basketballs (or chandeliers, or yachts) — those are just fictional props to denote the idea of luxury and wealth.
It would be one thing if someone started selling “Louis Vuitton Basketballs” or, for that matter, “Louis Vuitton Electrical Components.” That would be a classic example of dilution.
But to extend dilution to such fictional uses is, IMHO, very dangerous. What if this was in a movie?
(Note the Lanham Act requires that for dilution a “commercial use in commerce of a mark or trade name.” Does this qualify?)
If the commercial were “a work of fiction,” such as a sketch on a TV program or even a YouTube video, I’d agree. But this commercial, while obviously depicting a fictional occurrence, is very much a use in commerce. It’s a commercial. Commersh-uhl, yeah?
Ron, I understand it is a commercial. They are trying to get you to buy a car. The point is that the LVMH TRADEMARK is not being used commercially, not in the usual sense that it is being used to identify a real product.
Instead, LVMH’s mark is being used as a fictional prop to conjure up a theme — luxury being commonplace. The point of the commercial is that we cannot all be rich — we cannot all have yachts in our back yard, or chandeliers in our street, or play with LVMH basketballs. But at least we can buy a Hyundai.
Many fictional works have a commercial purpose — most movies and TV shows are made for commercial distribution and syndication. I.e. to make money — commerce. But no one has ever thought that they enjoy less than full 1st Amendment rights. Or that a passing reference to a famous brand would be actionable as dilution or infringement.
Imagine there was a TV show, where one of the characters dreams about winning the lottery. We see his dreams — he eats a snack of caviar on crackers, then gets into his Lexus and then drives down to his local playground for a quick game of 3-on-3 hoops with his old buddies. And then he takes out his LVMH branded basketball and plays the game.
Does LVMH have a cause of action for diltion against the TV producer?
The real problem is that dilution is a very broad, amorphous concept, and in my view this Complaint is pushing that theory beyond the bounds of what it was meant to protect.